Bindura seeks exchange rate review

Shakeman Mugari

BINDURA Nickel Corporation (Bindura) chief executive officer Leonard Chimimba says if the exchange rate is not reviewed urgently it will erode the value of the company ea


In an interview Chimimba expressed concern about the stagnant exchange saying it would erode the group’s earnings.

“Of concern now to the company and the mining sector as a whole is the exchange rate that has not been reviewed since February,” said Chimimba.

The Zimbabwe dollar is currently pegged at $824 against the United States greenback, up from $55 previously. He said the current exchange regime puts pressure on the group earnings.

Chimimba however, refused to quantify the impact of the delay on the earnings.

Government promised under the National Economic Revival Programme (Nerp) initiative to adjust the exchange rate to match the prevailing situation.

Chimimba said the new rate should match the input costs that was hiked due to inflation and the weak Zimbabwean dollar.

A review of the exchange rate was expected in June.

Commenting on the group core business, the chief executive said the future looks promising, buoyed by the recent increase in the nickel prices on the international market. Nickel is trading at around US$9 757,50 per tonne.

Indications are that the trend would continue.

“The firming nickel prices are encouraging for the company,” Chimimba said. “We also have indications the trend could continue in the near future. We are however not at liberty to comment on the company earnings.”

The company recently embarked on a shift-deepening project at Trojan, a move that could stretch the life-span of the mine to 2013.

The project is expected to improve the ore grade and the rock volume from the mine.

On the production side, Chimimba said total volumes were likely to be at last year’s level but the value had increased.

“We had a furnace rebuilt and during that period we were stock piling we have stock for two months,” he said. “But that has not affected our progress. Our production quotas are in line with budget.”