Bindura Nickel Corporation (BNC) says it will focus on commissioning the SubVertical Rock Winder (SVR) bull gear in the fourth quarter of the firm's trading period, which ends in March.
The equipment has stalled production since September 2023.
The SVR is one of the company's major pieces of fixed mining equipment and is used to hoist ore from underground. Its deterioration resulted in the hoisting capacity of the SVR declining to just 25 percent of its installed capacity by September 2023.
"In the last quarter of FY2024, the company will focus on commissioning the SVR after bull gear replacement and instituting stringent budgetary controls and cost containment measures in response to the challenging operating environment," said Mr Believe Dirorimwe, the company's finance director, in a trading update for the period to December 31, 2023.
He said to address the limited and deteriorating hoisting capacity the company procured a replacement SVR bull gear of similar size and duty, and initiated the SVR bull gear replacement project, necessitating a transient shutdown from September 22, 2023.
The project was initially scheduled for completion by October 31, 2023, however, it was extended to the end of February 2024 due to some technical challenges.
"As a result of the shutdown, no ore was mined or milled, and no nickel concentrates were produced during the third quarter of financial year 2024," said Mr Dirorimwe.
He said that to achieve long-term sustainability, the business recognises the need to implement strategic initiatives focused on full recovery and operational efficiency.
Analysts expect nickel prices to remain subdued in the last quarter of the firm's trading period and to settle at an average of US$17 000 per tonne during the calendar year 2024.
Global nickel prices are expected to remain under pressure during the calendar year 2024 due to the surplus in the nickel market coupled with weak demand.
In terms of overall performance for the nine months, the company mined 51 770 metric tonnes of ore, milled 50 907 metric tonnes of ore, and produced 275 metric tonnes of nickel in concentrate.
Mr Dirorimwe said the company did not incur unit costs during the third quarter of financial year 2024 because of the temporary shutdown necessitated by the SVR project.
"However, the company recorded cash costs (C1) of US$45 262 per tonne, C2 costs of US$50 366 per tonne, and C3 costs of US$52 348 per tonne in the comparative period last year.
The average London Metals Market (LME) nickel price for the quarter of US$17 211 per tonne was 32 percent lower than the price of US$25 349 per tonne, which was realised in the same period last year.
"The price decline was attributable to a surge in global nickel supply and weak demand, and no nickel concentrate sales were recorded during the period owing to the shutdown," said Mr Dirorimwe. During the period under review, tonnes of ore mined, at 177,179, decreased by 37 percent in comparison to 281,560 tonnes achieved for the same period last year.
Mr Dirorimwe said run-of-mine ore was low due to the deterioration of the SVR bull gear, and in line with the decrease in the tonnes of ore mined, the tonnes of ore milled, at 163,674, decreased by 42 percent from 281,135 tonnes recorded in a similar period last year.
Head grade, at 1,10 percent, declined by 19 percent from the 1,35 percent attained in the comparable period last year due to the down-dip reduction in the footprint of the high-grade resource. Consequently, nickel in concentrates produced, at 1,314 metric tonnes, was 40 percent lower than the 2,192 metric tonnes recorded for the same period last year due to lower milled tonnage and grade of mined ore.
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Nickel in concentrates sales for the period, at 1 416 metric tonnes, were 40 percent lower than 2 353 metric tonnes sold during the same period last year, with the sales decline in line with the decline in production.
Mr Dirorimwe said despite facing operational challenges, particularly the prevailing low nickel price, Trojan Nickel Mine sat on approximately 13,13 million metric tonnes of nickel ore at an average grade of 0,97 percent.
He said this substantial resource gave a mine a life of at least 10 years at maximum design production capacity.
