16 January 2013

Zimbabwe: BNC Resumes Milling Operations

BINDURA Nickel Corporation will restart milling operations early next month, paving the way for concentrate exports, chief operating officer Mr Batirai Manhando has said. The company, which operates Trojan Mine - the largest nickel mine in the country - would restart the milling circuit, now in the final stages of refurbishment.

"We have so far built half a month's stock supply (to the milling plant) and we are on course to resume milling in the first week of February," said Mr Manhando in an interview last week. "At the moment, we are putting some final touches on the milling plant."

BNC was placed under care and maintenance in 2008 after succumbing to volatile metal prices on global markets and the crippling economic challenges in the country at the time.

Recently, after dollarisation and an improved operating environment countrywide, together with a recovery in the nickel price, BNC management decided the time was right to restart operations at the mine.

The strategy is to phase the restart operations with the first step being Trojan mine.

But BNC has struggled to raise the required funding for the restart until in June last year when its major shareholder, Mwana Africa, offered to underwrite a US$21 million rights issue.

Mwana Africa, through its subsidiary, Zimnick, invested US$21 million into BNC through this process. Other shareholders invested an additional US$2 million in new cash.

BNC said the US$23 million was sufficient to fund the first year of the Trojan restart, adding that the group would require an additional US$11 million for the second year of the restart.

After the mine has restarted, BNC is targeting an annual production of 7 000 tonnes of nickel in concentrate.

It will take about three years to reach this level of production. BNC has already entered into an off-take agreement with Glencore who will purchase all the nickel concentrate produced by Trojan.

Mr Manhando said the company would raise US$11 million towards the end of the year through debt to further recapitalise the operation. This will mark the full recapitalisation of the firm.

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