BINDURA Nickel Corporation (BNC) pumped close to US$5 million in fresh capital during the half year ended September 30, 2021, giving the listed giant fresh impetus to ramp up output as boom times return in the aftermath of Covid-19 inspired hard lockdowns most of 2020.
Across the world’s biggest markets, inventories had plummeted during the Covid-19 induced meltdown, and global markets have been returning to kickstart operations with low stockpiles, which speaks in favour of stronger demand that requires well-capitalised producers like BNC.
Nickel is used in stainless steel, and was up about 25% at the end of November.
For BNC, pumping up fresh funding became crucial after the Zimbabwe Stock Exchange (ZSE)-listed giant announced inking fresh deals with a Swiss offtaker in August, which ended a long-running relationship with commodities giant Glencore.
The zest to deploy fresh capital at the firm’s Bindura operation was also inspired by massive growth in international commodity prices, which are projected to continue the northwards march as the world learns to live with the virus.
London Metal Exchange prices advanced by 38% during the review period, ending at US$18 234 per tonne, compared to US$13 214 per tonne during the same period in 2020, possibly giving African nickel producers the confidence that boom times had returned following the bloodbath.
The markets could be absorbing more stocks to pile for now, in case of another round of hard lockdowns.
“The company continued with its ongoing programme to replace old and obsolete mobile mining equipment,” BNC chairperson, Muchadeyi Masunda said.
“Total capital expenditure for the period was US$4,7 million of which US$1,2 million was spent on a new exploration drill rig, a load, haul and dump (LHD) machine and also on major rebuilds of existing LHDs and rigs. A total of US$1,1 million was spent on haulage and ramp developments to provide operational access to deeper resources.”
He said the firm spent almost US$1 million upgrading its subvertical rock winder and refurbishing the concentrator.
Tapiwa Sibanda, head of strategy at Trade Winds, said the giant was positioning itself not to disappoint the new offtakers.
“There is so much happening on the international markets,” Sibanda said.
“First, there has been massive demand for commodities because generally markets want to stock up. For BNC, the new deal could be offering bigger growth opportunities and they don’t want to be found wanting,” he said.
BNC said although sales volumes were in line with volumes sold in the comparative period last year, revenue increased by 41% to US$35,3 million during the review period, compared to US$25 million previously.
In August BNC said it had concluded a fresh deal with Zopco SA, a Switzerland domiciled offtake partner.
But there is so much taking place at BNC.
The firm is to delist from the ZSE this month and switch to the forex indexed Victoria Falls Stock Exchange.
The delisting, tentatively set for December 15 will bring to an end BNC’s 50-year dalliance with the ZSE, having joined the bourse during the Rhodesian era in 1971. (Zimbabwe Independent)