BNC Pin Hopes On Sustained Nickel Price Gains

Bindura Nickel Cooperation (BNC) says the sustained stable nickel prices seen since the beginning of the year of more than US$ 13 000 per tonne will make viable its high volume-low grade resource strategy.

The rebound in the steel industry and a rising electric vehicle manufacturing drove nickel consumption beginning of the year although this rise in prices remains subjected to uncertainties in the global economy due to the threat of the pandemic.

The Bindura-based miner is hence pinning hopes on anything above US$ 13 000 per tonne as it seeks to exploit low-grade resource.

“The strategies adopted by BNC, going forward, are high volume, low grade operation. This model will enable the Company to exploit the predominantly low-grade resource, subject to the nickel prices remaining above US$13 000 per tonne,” said BNC chairman, Muchadei Masunda in the company’s 2021 annual report.

“Full utilization of processing plant capacity: This will see the Company fully utilizing the installed processing capacity of the Trojan Mine concentrator (one million tonnes per annum).

At close of the Group’s 2021 financial year in March, yearly average LME Nickel Price stood at US$ 14,999 while quarter average price to March was relatively higher at US$ 17,625.

Earlier, the pandemic-related lockdowns in the first half of 2020 and the related uncertainty led to a decrease in the global nickel mine output by -4 percent -year on year.

However, “C commodity prices continued their recovery in the first quarter of 2021 and are expected to remain close to current levels throughout the year, lifted by the global economic rebound and improved growth prospects,” according to the World Bank’s semi-annual Commodity Markets Outlook.

Trojan Nickel Mine Limited is currently the only operating unit within BNC.

On average, it mines and produces  around 400 000 tonnes of ore and 5 500 tonnes of nickel in concentrate per annum respectively, which translates into close to 40 percent plant capacity utilization.

“The low capacity utilization has largely been driven by a mining strategy anchored on a high-grade/low-volume ratio of 1 part massives to 2 parts disseminated ore,” said Masunda.

Profit and total comprehensive income for 2021, at US$1.7 million, was 97 percent higher than the US$0.89 million recorded in the prior year.

The achieved profit translates to basic and diluted earnings per ordinary share of 0.139 and 0.133 United States cents respectively.

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