Africa’s only integrated nickel mining and smelting company, Bindura Nickel Corporation (BNC) will further push the restart of its smelter plant into its next financial year commencing in April 2020 owing to high power cost of running the plant at current tariffs, 263Chat Business can reveal.
The new smelter plant, which is now 83 percent complete should have been completed this year, but management decided to put the project on hold, instead directing resources at replacing mobile equipment underground to ramp up volumes and for further exploration.
Speaking on the sidelines of a stakeholder tour of its Trojan Mine in Bindura yesterday, company managing director, Batirai Manhando said if the nickel prices do not go further, the company will be left with one choice but to lobby for a special power tariff.
“We have decided to stop progress on the smelter plant and as you can see we are replacing a lot of mobile equipment underground so that we are guaranteed of the ore sources before we move to the smelter. The other main reason is that for you to run the smelter you need a lot of power and lots of power than running Trojanite. Power comes at a cost, so with the current prices the smelter will not make money but if the tariff is improved, then maybe we can make money,” said Manhando.
ZESA increased the electricity price in third quarter of 2019 to 162.16 cents per Kilowatt/Hour from 38.61cents per KWH.
At the present moment, an improved global nickel price will help matters for the miner or maybe an option to immediately open its other mines such as Hunters Road and Shangani to increase volumes into the smelter so as to attain viability- but this will be a long-term strategy as Hunters Road needs quiet some work on it before its due for opening.
Currently, average nickel price stands at US$ 12 000 per tonne against a minimum of US$ 16 000 the company requires to run the smelter sustainably at Trojan.
‘It depends on the price, if the nickel price is ok we can run it, if it’s not then we have to seriously lobby government on a special tariff for us to run just like you know the Chrome guys have a special tariff .
“The model for the smelter restart which we raised money on was actually running on Trojan alone but on a nickel price above US$ 16 000 so the smelter can run with Trojan but it requires a certain price to run, anything below like I’m saying we can actually lose money,” Manhando said.
The company is already looking forward to a new investor, Sortic, a local consortium -who are acquiring a 74.73 percent stake from ASA Resources.
To complete the Smelter, the company needs between US$ 7 -10 million with work left expected to be completed in just six months of commencement.
BNC hopes to open its Hunters Mine project, which is estimated to be harbouring 200 000 tonnes worth of nickel following completion of feasibility studies.