Bindura Nickel Corporation (BNC) has said the smelter restart project has been hampered by cash flow problems, arising from low nickel prices.
BY FIDELITY MHLANGA
BNC is a subsidiary of Asa Resources.
BNC managing director, Batsirai Manhando said BNC smelter restart project was 83% complete after $21,5 million was spent on the project, but still required $5 million.
He said nickel prices were weighing down prospects of raising funds required to finish the project.
“If the nickel prices are down there are some business units you cannot bring online because the cost will be bigger than the revenue you generate. Currently, the nickel prices are around $11 000 to $12 000 per tonne. The smelter is at about 83% complete and it is being affected by cash flow problems which come in because of low nickel prices,” Manhando told NewsDay last week.
He added that if funds were available the project would be finished in the next five months.
“We have committed about $21 million. What’s left there is $5 million because that’s a $26,5 million project. If the money was here today within five months we would have completed but the money is not there. We are generating the cash from our operations because we have already borrowed $20 million and the balance we are getting it from our own operations. That is why it has taken long because cash generation when prices are low is difficult,” he said.
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In July this year, the company said the upgrade and refurbishment of the smelter was ongoing and was expected to be completed in the 2017/18 financial year.
At that time, the company said the furnace refractory building, major civil works were completed and a new 30-tonne crane was installed whereas water jackets installation was still in progress.
During the financial year ended March 31, 2017 nickel production increased by 2% per year to 6 762 tonnes from 6 621 tonnes in the comparative period in 2016.
During the same period, nickel sales tonnage increased to 6 705 tonnes from 6 613 tonnes during the year whereas revenue increased by 7% to $45,1 million from $42,3 million. Gross profit was $13,9 million from $9,1 million in prior year.
There was a 3% fall in the achieved average nickel price received per tonne to $6 519/t from $6 737/t in same period last year.
