Bindura production down, profit up

Bindura’s nickel sales for the six months to June were down by 32 percent due to two months furnace rebuild but net profit shot up from $1.5 billion to $12.8 billion. Profit for the year ending December was only $403.1 million.

It says demand for nickel was firm with the company realising a price of US$3.73 a pound compared to US$2.96 last year. It was, however, unable to take advantage of this price improvement because of the two-month furnace rebuild.

Production at the mines was 13 percent down due to the shutdowns as well as the deterioration of scooptram availability. Total revenue increased from $7.9 billion to $17.3 billion with operating profit shooting up from $2 billion to $17.1 billion.

The company says its viability may be affected by the continued fixed exchange rate of $824 to the greenback. It says this exchange rate should have been reviewed at the end of June as had been announced by the government, and again at the end of September, but it has remained static while the parallel market exchange rate has shot up from just under $3 000 to over $5 000.

It says its operations may also be affected by the shortage of coal and transport for its concentrate. Demand for nickel, however, is expected to remain firm in the short term.

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