Strong nickel prices spur BNC performance

IMPROVED global nickel prices spurred Bindura Nickel Corporation’s (BNC), 2021 financial year performance in face of extremely difficult circumstances induced by the Covid-19 pandemic.

London Metal Exchange (LME) cash settlement price for nickel rose by 7 percent during the 2021 financial year to reach an average of US$14 999 per tonne compared to US$13 983 per tonne in 2020.

However, the nickel miner managed to sell 5 496 tonnes of nickel in concentrate, less than the 5 685 tonnes sold during the prior comparable period, a 189 decline in tonnage.

Demand for nickel is expected to remain high, with projected average growth in excess of 4 percent per annum.

The use of nickel in the production of electric vehicles is expected to increase to 18 percent by 2025.

Stainless steel has been ( and will remain) the main consumer of nickel (as an alloying element) and the demand is expected to grow at an average of 67 percent per annum going forward.

BNC managing director, Thomas Lusiyano in the company’s annual report acknowledged that the 2021 performance was enhanced by better prices on the global market.

“Prices were firmer during the year as governments intervened with economic stimuli to aid economies that had been hard hit by lockdowns due to COVID-19.

“The positive results were driven by an increase in global nickel prices during the year and our ability to sustain operations during a global pandemic. Nickel price was also supported by current and anticipated demand from the electric vehicle industry,” said Lusiyano.

Despite extraordinarily challenging circumstances caused by the Covid- 19 pandemic, BNC delivered a satisfactory operating performance for 2021, leading to positive financial results.

In the year under review, BNC’s revenue improved by 13 percent to close the year at US$59,2 million compared to US$52,4 million) realised in 2020:

Operating profit increased by 17 percent to US$ 3,3 million in comparison to US$ 2,8 million in 2020 while profit attributable to shareholders increased to US$ 1,7 million a 97 percent improvement from US$0,9 million realised in 2020.

Total capital expenditure for the year amounted to US$8,9 million, mainly in respect to spending towards Sub- vertical Rock ( SVR) winder, mechanical and electrical upgrades which gobbled US$1,7 million while shaft re-deepening and Load-Haul-Dump (LHDs) consumed US$1,1 million and US$1,2 million respectively.

Base metal prices were weak at the beginning of the financial year under review as a result of low economic activity due to the COVID-19 induced lockdowns.

Most nickel is used for alloying elements, coatings, batteries, and some other uses, such as kitchen wares, mobile phones, medical equipment, transport, buildings, power generation and jewelry.

The electric car revolution is set to transform the nickel mining companies since the product is a major component of hybrid car batteries.

In the outlook, the company is banking on the roll-out of COVID-19 vaccines which has led to the gradual resumption of economic activity.

Market sentiment is eventually recovering, mainly bolstered by economic stimuli from central banks globally and improved demand from China.