BINDURA Nickel Corporation (BNC) has in the last six months lost toll-refining revenue in excess of US$5 million due to the perceived country risk. Companies providing toll material to BNC ha
ve raised concern over the current political and economic situation in the country.
BNC managing director, Fred Moyo, confirmed the development saying the company was currently negotiating other toll contracts to replace those that had been terminated due to the perceived country risk.
“We have lost business mainly from Canada and Australia mainly because of their concerns over their material coming into the country of which this business was a significant contributor to the company,” Moyo said.
The companies have also raised concern over the unlikely return of their material when processed by the company resulting in them withdrawing their business.
BNC’s toll business is a system whereby the company processes ore on behalf of other companies at its plant at a fee of US$14 500 a tonne mainly because of its available capacity. BNC was processing in access of 3 500 tonnes of ore from the two countries including China, which has decided to process its own mineral ore.
The decision by the companies to cut their toll supplies to BNC has seen the company’s turnover declining by 12% in the half year to close at $586 billion compared to last year’s figure of $666 billion.
Toll revenue in the previous company’s results contributed an average of 20% of the company’s turnover. Moyo said the company’s other toll business from China and Asia had been taken over by China, which has built its own nickel processing plant. “China has built its own plant and are processing their own material while at the same time the country is now intercepting all material from the Asian markets that we previously served,” said Moyo. He said the company was currently negotiating new toll contracts with emerging nickel-producing countries.
“We actually have interesting toll prospects coming out which are currently finalising with mines in countries such as Mozambique, Zambia and DRC,” Moyo said. He said the company was currently working on increasing its milled ore, which took a dive in the half year by 9% to 862 648 tonnes. To increase capacity BNC has put an initial US$5 million investment into its Shangani mine. “We are going to invest US$5 million into Shangani by deepening the mine shaft by 300 metres in an effort to increase its life span to 2014,” said Moyo.
He said the company was also deepening its Trojan mine shaft as it continues with its efforts to increase the production levels.
Moyo said despite the decline in nickel world prices, the current price of US$13 500 was sufficient to sustain its operations.
“With the current price of US$13 500 we can survive as a company, but if it slides further, them the company will have to take measures to adjust to move,” Moyo said. He said the company’s insurance company had paid for the nickel that had been stolen in South African.
BNC declared a profit after tax of $61 billion, a registered decline of 54% compared to $132 billion the previous year.