CASH cost of production of nickel at Bindura Nickel Corporation (BNC) has increased in line with the upward move in the rate of inflation to close the half-year at US$4,04 per pound.
In the period under review, BNC’s group’s turnover decreased by 12% to close the half-year at $586 million compared to last year’s figure of $666 million.
The nickel producers attributed the decline to falling sales tonnage and tolling fees.
“The decrease was largely due to a 15% and 56% decline in sales tonnage of nickel and toll refining revenue respectively,” the company said.
BNC’s profit after tax also took a tumble of 56% to close at $61 billion compared to the previous year’s figure of $132 billion.
“Consequently, the group’s profit after tax for the half-year amounted to $61 billion – a decrease of 54% on $132 billion achieved during the comparative period last year,” said the company.
Net cash inflow for the group from its operations closed at $116 billion compared to net cash outflows of $102 billion last year.
“Net borrowings as at 30 June were $76 billion, a decrease of 74% on the comparative period last year,” the company said.
BNC achieved nickel sales of 2 966 tonnes, 15% lower compared to last year’s sales volumes.
“The group’s nickel sales for the six months, at 2 966 tonnes, were 15% lower than the comparative period last year. This reduction in sales was mainly due to production shortfalls as a result of equipment down time,” the company said.
The nickle producers however said they had managed to secure favourable market rates for their products at US$7,05 per pound compared to last year’s figures of US$5,97 per pound.
The group’s mines produced a total of 862 648 tonnes of ore, 9% lower compared to last year while its concentrate levels also declined.
“Nickel concentrate production of 3 520 tonnes was 9% lower compared to the same period in 2004,” the company said.
BNC in the period under review, produced 3 070 tonnes of nickel, a decline which it attributed to inadequate supply of materials from its mines.
“Consequently, the group’s nickel production for the first half of the year of 3 070 tonnes was 10% down on the 3 415 tonnes achieved during the comparative period last year,” BNC said.
“Performance was down due to inadequate supply of feed materials from BNC’s own mines, as well as below activity on toll materials because of the perceived country risk and the capacity constraints at the National Railways of Zimbabwe,” the company said.