A plan to re-open a smelter at Bindura Nickel Corporation (BNC)’s Trojan Nickel Mine has stalled after the company ran out of funding, an offical has said.
BNC managing director Batirai Manhando told analysts and journalists last week at a briefing in Harare the project to restart the smelter at Trojan was 83% complete, but had stalled due to lack of funding.
“The project has been decelerated by limited funding following the full utilisation of the US$20 million smelter bond,” he said.
Manhando added that the project needed further funding and an increase in nickel price on the world market.
Management sees the project being completed in 2018 should funding be secured, adding the total committed expenditure was US$21,5 million.
BNC in 2015 floated a US$20 million bond with repayment funds going into a sinking fund to be capitalised from nickel sales proceeds. A sinking fund is regulated and securitised in terms of the Bond Trust Deed which, in turn, is managed by an independent trustee.
According to management, completed sections are now under care-and-maintenance awaiting completion of the whole plant.
The company says it has completed work on the crushing plant, refurbished the water cooling system, and completed the refurbishment of the electrostatic precipitator as well as mixing chamber roof repairs.
Management did not say how much money was needed to complete the project.
The company said nickel sales tonnage increased to 3 485 tonnes in the half year H1 FY17 from 464 tonnes in the H116.
Revenue increased by 7% to US$24,1 million from US$22,5 million in the same prior period last year.
There was a 4% rise in the achieved average nickel price received per tonne to US$6,422 per tonnes.
Capital expenditure of US$2,4 million incurred during the period.
The funds went into the restarting of the smelter and deepening of the mine.
Cash flow generation improved over the period due to improved nickel prices and volumes from US$2,8 million in H116 to US$4,5 million.