Mwana Africa says it has raised $33,5 million from the issue of new shares with the proceeds expected to help fund the restart of Bindura Nickel Corporation’s (BNC) Trojan Mine.
Early this week the company announced the China International Mining Group Corporation (CIMGC) would invest $21,2 million to restart BNC which was closed at the height of Zimbabwe’s hyperinflationary turmoil in 2008.
And in a statement Tuesday, Mwana said CIMGC had conditionally subscribed for 242 million new ordinary shares, representing 22% of the company’s overall issued ordinary share capital.
Mwana holds a 52,9% stake in BNC, the only fully integrated nickel operation in Africa, comprising three mining projects including the Trojan Mine, a smelter and a refinery.
But the London-listed company has struggled to reopen the mine since it was put on care and maintenance in 2008 following a collapse of nickel prices and hyperinflationary concerns in Zimbabwe.
Officials, however, believe Chinese investment will help fund BNC’s restart.
“The company believes that, with the assistance of CIMGC, it will be able to secure further project funding for BNC and the group’s other projects through CIMGC’s banking and industry connections,” management said Tuesday.
An industry analyst added: “This is a major step towards the company’s plans to restart the Bindura nickel operations.
“The BNC operations will initially restart as the Trojan Mine and concentrator, with a 9% concentrate sent to off-taker Glencore International.
“The eventual aim is to reopen Southern Africa’s only fully vertically-integrated nickel operation at Bindura.” Mwana Africa believes economic and operating conditions in Zimbabwe and general nickel market condition are conducive to the restart of operations at the Trojan Mine which can treat 1,1 million tonnes of nickel a year.
Zimbabwe’s economy is slowly recovering after a 10-year collapse, aided by a unity government between long-ruling President Robert Mugabe and his rival Prime Minister Morgan Tsvangirai.
The unity government abandoned the local currency — made worthless by world-record hyperinflation — and lifted controls that had strangled trade and investment.