Im­proved prices boost Bin­dura Nickel Mine

Chronicle (Zimbabwe) - - Business Chronicle - Oliver Kazunga

BIN­DURA Nickel Mine’s fu­ture is bright on the back of op­er­at­ing costs the com­pany has man­aged to keep un­der con­trol as well as the an­tic­i­pated im­prove­ment of the price of nickel on the in­ter­na­tional mar­ket.

Bin­dura Nickel Mine (BNC) is owned by Asa Re­source Group for­merly Mwana Africa.

In a quar­terly up­date for the pe­riod ended June 30, 2016, Asa chair­man Mr Yat Hoi Ning said de­spite hav­ing re­mained close to a five-year low at about $8 800 per tonne, the nickel price has since last month out­per­formed most base met­als trad­ing at $10, 000 a tonne.

“Op­er­at­ing costs are well un­der con­trol and with the smelter com­ing on stream at a time when the nickel price is nor­mal­is­ing, it’s rea­son­able to ex­pect BNC’s fu­ture to be much brighter than in the re­cent past,” he said.

“It has been well re­ported that both the Philip­pines and China have ma­jor en­vi­ron­men­tal con­cerns over nickel pro­duc­tion.

“This could ac­cel­er­ate the sup­ply deficit and place up­ward pres­sure on the nickel price —should this hap­pen, this would open fur­ther op­por­tu­ni­ties for the group,” he added.

Tro­jan Nickel Mine, which is owned by BNC, though all its sus­tain­ing costs in­creased to $6,489 in the first quar­ter, BNC’s stated medium-term tar­get re­mains in the range of $5,000/t to —$6,000/t over the medium-term.

“If, as many ex­pect, the nickel price stays above $10,000/t, in­vestors can clearly cal­cu­late the price dy­nam­ics shift­ing in Tro­jan’s favour.

Ad­di­tion­ally, Mr Ning said once the smelter is in full pro­duc­tion next year, BNC’s per­cent­age of the mar­ket price was bound to in­crease re­mark­ably.

“Manage­ment be­lieves BNC has weath­ered the worst of the storm. Against a very low nickel price, BNC’s Tro­jan mine achieved an ex­cep­tional re­sult in its pre­vi­ous quar­ter when both all sus­tain­ing costs and nickel sales per­formed much bet­ter than their long-term his­tor­i­cal av­er­age. Any com­par­i­son there­fore be­tween the last quar­ter (Q4 FY2016) and this quar­ter (Q1 FY2017) is go­ing to ap­pear dis­ap­point­ing,” he said.— @okazunga.

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