A tough quarter for the country’s biggest nickel producer paints a stark picture of the pressures that Zimbabwean miners are facing – collapsing metal prices abroad, plus rising costs and low capital at home.
Bindura Nickel Corporation (BNC) didn’t mine any nickel at all during the period because of equipment failure. This is happening at a time when nickel prices fell 48% last year, while costs of production soared at home.
The company reports the failure of its Sub-Vertical Rock Winder (SVR) bull gear, the equipment used to lift ore from underground. To install new equipment, the company had to shut down the plant last September. Installation is only expected to be completed this quarter after BNC faced more technical problems. This means that BNC has not produced or sold any nickel for months.
“As a result of the shutdown referred to above, no ore was mined or milled, and no nickel in concentrates were produced during the third quarter of Financial Year 2024. In the comparable period, the company mined 51 770 tonnes of ore, milled 50 907 tonnes of ore, and produced 275 tonnes of nickel in concentrate,” BNC reports in an update.
BNC, a subsidiary of Kuvimba Mining House, mirrors the crisis of most Zimbabwean mining firms – they are short of capital to reinvest in their mines at a time when metal prices are falling and costs are rising.
Says BNC: “Currently, the Company is faced with several challenges that threaten the survival of the business and the restart of the mine following the replacement of the SVR bull gear. These challenges include low nickel prices on international markets, high domestic input costs, particularly electrical power costs which have increased by more than 60% over the last 16 months, and the need for capital to refurbish underground mining mobile equipment and the concentrator plant, and development of the mine which has been lagging for the past two decades.”
Nickel prices are forecast to remain low this year because of surplus production from China and Indonesia.
On resources, BNC’s tale is a familiar story across the industry; there is vast potential, but little capital to exploit it. Trojan Nickel Mine sits on around 13.13 million tonnes of nickel ore at an average grade of 0.97%. This substantial resource gives a life of mine of at least 10 years at maximum design production capacity. However, the company does not have the capital needed to mine the resource.- NewZWire
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