By ETimes
Bindura Nickel Corporation posted a wider first-half loss before tax of US$8.88 million from a US$5.47 million a year earlier owing to low nickel prices.
This comes as anxiety is mounting over the threat of softening mineral prices, hurting Zimbabwe’s economic progress this year and the next, with analysts warning that escalating tensions in the Middle East could worsen the situation.
In the half year ended 30 September 2023, the miner’s topline went down 43% to US$18.5 million from US$32.5 million in the comparative period.
This was attributed to low nickel sales volume and low nickel prices.
On the other hand, the cost of sales declined by 22% to US$24.7 million from US$31.5 million for the same period last year.
“The decrease in cost of sales was mainly due to a lower run-of-mine,” Muchadeyi Masunda, BNC chairman, said in a statement accompanying the results.
As a result, the miner recorded a gross loss of US$6.2 million compared to a gross profit of US$1.05 million reported in the same period last year.
On operations, ore mined depreciated by 23% to 177,179 tonnes from 229,790 tonnes previously.
“The run-of-mine ore was low due to the deterioration of the Sub-vertical Rock Winder (SVR) bull gear, resulting in a 70% decline in SVR hoisting capacity,” he said.
“The decline in hoisting capacity also constrained development work planned for the first half of FY2024 as ore hoisting was prioritised over waste.”
BNC bought new bull gear that was comparable in size and duty to the existing one and started the Bull Gear New Project in order to remedy the limited lifting capacity issue created by the damaged SVR bull gear.
“The project is scheduled to be commissioned during the third week of December 2023,” Masunda said.
Ore head grade, at 1.10% nickel, was 13% lower than the 1.26% nickel registered in the previous period on the back of reduced high-grade massive ore sources.
Recovery at 73.3% was 13% lower than the 84.2% recorded in the comparable period.
In the same vein, ore milled fell 29% to 163,674 tonnes due to lower mined volumes.
Nickel in concentrate production declined 31% to 1,314 tonnes.
“The decrease was attributable to the lower ore mined and milled. Resultantly, Nickel sales volume was 1,416 tonnes, 34% lower than last year’s sales of 2,146 tonnes.”
The C1 cash cost of US$17,068 per tonne was 21% higher than the previous period’s US$14,078 per tonne, while the C3 all-in-sustaining cost of US$19,136 per tonne was 13% higher than last year’s unit cost of US$16,913 per tonne.
It did not declare a dividend, citing the losses and the need to retain cash for operations.
In the outlook, the chair said they have taken calculated steps to guarantee a return to cash flow and profitability in the near future amid a difficult forecast for nickel prices-HARARE