- Ore mined increased by 8% to 117 249 tonnes
- SVR capacity decreased by 70%
- The production of nickel in concentrate was 9% lower, with 823 tonnes produced compared to 902 tonnes
Harare- The mining company, Bindura Nickel Corporation, has experienced growth in ore mined during the first quarter ended June 2023. However, the company also faced challenges due to the deterioration of the Sub-Vertical Rock (SVR) winder bull gear, which impacted the overall performance.
The quantity of ore extracted for the quarter reached 117,249 tonnes, indicating an 8% increase compared to the 108,632 tonnes achieved in the same period of the previous year. This growth was attributed to the implementation of new underground Load, Haul, and Dump (LHD) equipment, which improved the efficiency of the mining operations.
LHD is a type of underground mining equipment used to excavate, transport, and unload ore or other materials in mining operations. This improved equipment contributed to greater efficiency and productivity in the mining process, enabling the extraction of a larger quantity of ore within the given timeframe.
However, the number of run-of-mine ore remained low due to the degradation of the Sub-Vertical Rock (SVR) winder bull gear, which led to a significant 70% decrease in SVR capacity.
According to the Company, this decline in capacity also limited the progress of development work scheduled for the quarter, as the focus shifted towards prioritising the hoisting of ore rather than waste material. As a result, the unveiling of planned mining areas experienced a delay.
The ore head grade, measuring at 1.02% Nickel, was 2% lower compared to the 1.04% Nickel grade achieved during the same period in the previous year. This decrease was primarily due to the unavailability of high-grade massive ore sources.
Although the number of ore milled during the current period remained consistent with the tonnage milled in the corresponding period last year, the performance of the Concentrator Plant was hindered by intermittent breakdowns caused by the unavailability of essential spare parts for different components of the plant.
As a result, the production of nickel in concentrate was 9% lower, with 823 tonnes produced compared to 902 tonnes in the same period last year due to the adverse effect of processing lower-grade ore, which had a negative impact on the overall output of nickel concentrate.
During the period being reviewed, unit costs experienced an increase primarily due to two factors. Firstly, the high cost of maintaining aged underground mining mobile equipment contributed to the rise in costs and there was an increase in local operating costs driven by disparities in exchange rates.
The lower production of nickel in concentrate had a negative impact on unit costs. The cash cost (C1) for the quarter was US$14,425 per tonne, which was a 2% decrease compared to the same period in the previous year (US$14,770 per tonne).
The average London Metal Exchange (LME) Nickel price for the quarter was US$21,933 per tonne, which was 1% higher than the forecasted price of US$21,783 per tonne.
However, it was 24% lower compared to the US$29,029 per tonne achieved in the same period of the previous year. This decline in price was due to an increase in global Nickel supply, which exceeded the demand.
The sales of Nickel in concentrate during the period reached 799 tonnes, a 19% decrease compared to the 989 tonnes sold in the same period last year. This decrease in sales aligned with the decline in production.
Due to the combination of high operating costs and low production, the company incurred a loss for the quarter.
In the outlook, the average Nickel prices on the London Metal Exchange (LME) are predicted to decline in the upcoming quarter due to concerns about the negative macroeconomic environment and the increasing supply of Nickel. However, there is optimism that prices will improve after September 2023, driven by an expected acceleration in Chinese economic growth due to additional stimulus measures and more accommodative monetary policies in the United States.
Thus, nickel prices are projected to remain subdued in the quarter leading up to September 2023 but are anticipated to improve in the last quarter of the calendar year 2023.
“The replacement of the damaged SVR winder bull gear during the period September to October 2023 is expected to boost production,” said the Company.
“In addition, it is anticipated that a combination of the old, new, and hired mobile equipment will increase the availability of equipment, which will result in an increase in production and thus, revenue and profitability.”
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