HARARE: Bindura Nickel Corporation’s revenue plunged 56 percent to $20,5 million in the interim to September 2015 weighed down by declining nickel prices. BNC reported in its financial results for the period under review that it realised average price for nickel of $7 654 per tonne compared to $11 809 in the same period last year, as prices nosedived on low demand in China.
The company also amended method of reporting nickel price received, cash cost and all-in sustaining cost. The average nickel price reflects actual not London Metal Exchange price for the period as previously reported.
“Cash costs and all in sustaining costs are now reported as actual costs incurred, previously these costs were adjusted for the opportunity cost forgone as a result of selling a nickel concentrate rather a nickel cathode, BNC said.
Revenue performance was also negatively impacted by a 29 percent decline in production after planned closure in June to allow for equipment upgrades. Africa’s only integrated nickel mining and smelting company says turnover in the half year comprised 2 762 tonnes of nickel concentrate from 3 879 in 2014.
In response to falling prices, BNC revised its mining plan to entail exploitation of higher grade massives and minimising low grade disseminated ore. The group said, September and October were profitable and BNC would recover and become profitable by end of the financial year in March next year.
BNC said that head grade in the half year to September 2015 was 1,41 percent compared to 1,51 percent in the same period in 2014 while recovery was better at 85 percent from 83 percent due to improved plant uptime.
Financially, the company incurred operating loss of $4 million from a profit of $12,5 million in the same period last year while loss after tax was $3,4 million from after tax profit of $8,5 million in the comparative period last year.
BNC said the shaft re-deepening project continued, but at a slower rate given the cash constraints caused by the declining price of nickel of global markets. Commissioning of the project is now set for 2016 /17 financial year. Two key projects were completed in the period under review; sub-vertical service winder, main rock winder drives upgrades as well as concentrator plant and sub-vertical medium voltage switch room equipment replacement.
BNC said that the 26,5 million smelter restart project is progressing well with expenditure at $$12 million commitments of $5 million having been confirmed. The BNC board is said to be conducting studies on the feasibility of modifying the smelter plant to a facility that can also process platinum group metals.
