, pub-3787448768440954, DIRECT, f08c47fec0942fa0 [google-translator]

BNC incurs heavy loss

KUVIMBA Mining House subsidiary, Bindura Nickel Corporation (BNC), incurred a loss in the quarter ended June 2023 after experiencing the disproportionately high operating costs and low production during the period under review.

In a trading update for the period April to June 2023, BNC company secretary Conrad Mukanganga said the nickel mining firm also experienced intermittent plant breakdowns owing to the unavailability of critical spares.

“Ore mined for the quarter, at 117 249 tonnes, increased by 8%, in comparison to the 108 632 tonnes achieved for the same period in the previous year due to the introduction of new underground load, haul and dump equipment,” Mukanganga said.

“However, the run-of-mine ore was still low due to the deterioration of the sub-vertical rock (SVR) winder bull gear which subsequently resulted in a 70% decline in SVR capacity.

“The decline in SVR capacity also constrained development work planned for the quarter as ore hoisting was prioritised over waste hoisting. This consequently caused a delay in the unveiling of planned mining areas.”

Ore head grade, at 1,02% nickel, was 2% lower than the 1,04% nickel grade achieved in the same period last year, due to the unavailability of high-grade massive ore sources.

Ore milled was relatively the same as the milled tonnage in the corresponding period last year.

“The concentrator plant performance was, however, compromised by intermittent breakdowns driven by the unavailability of critical spares for various components of the plant,” he said.

“Nickel in concentrate produced, at 823 tonnes, was 9% lower than the 902 tonnes produced in the same period last year, reflecting the adverse impact of the lower grade of ore processed.”

Mukanganga added: “Unit costs increased during the period under review at the back of the high cost of maintaining aged underground mining mobile equipment and the increase in local operating costs which was driven by exchange rate disparities.

“In addition, the lower nickel in concentrate production had a negative impact on unit costs. The cash cost for the quarter, at US$14 425 per tonne, was 2% down from the same period in the prior year, while the all-in-sustaining cost, at US$18 812 per tonne, increased by 15%.”

The average London Metal Exchange (LME) nickel price of US$21 933 per tonne was 1% higher than the US$21 783 per tonne which was forecasted for the quarter and 24% lower than the US$29 029 per tonne which was achieved in the comparative period in the previous year.

The price decline was attributable to a surge in global nickel supply which was outpacing demand.

Nickel in concentrate sales for the period, at 799 tonnes, were 19% lower than the 989 tonnes sold during the same period last year.

The sales decrease was in line with the decline in production.

“As a result of the disproportionately high operating costs and low production, the company incurred a loss for the quarter,” he said.

The LME average nickel prices, according to the secretary, are expected to trend lower in the quarter due to pessimism over the negative macroeconomic environment and growing nickel supply.

Mukanganga said the replacement of the damaged SVR winder bull gear during the period September to October 2023 was expected to boost production.

A combination of old, new and hired mobile equipment is also expected to increase the availability of equipment, which will result in an increase in production and thus, revenue and profitability. – (Newsday)

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