Bindura Nickel Corporation (BNC) says it will rely on the continued stabilisation of the nickel prices for it to complete the smelter refurbishment project which has remained stagnated at 83% completion for several years due to lack of funding.

The smelter project which needed an estimated capital injection of US$26.5 million and was expected to be completed by the 2017/2018 financial year has been put on hold for years with BNC taking a wait-and-see approach as its completion was hinged on increased nickel prices.

In 2015, BNC raised US$20 million through a bond issue to finance the restart of the smelter through a five-year bond with a coupon rate of 10% per annum and by 2017, the Company had used the raised funds to finance the project leaving it at 83% completion.

Over the years, the Company has often said that they will only proceed with the completion of the smelter restart project when the nickel prices are around a threshold of US$16 500 per tonne and now that nickel prices have surpassed the threshold, they are now closely watching its stabilisation.

“We were estimating that it will become viable at a nickel price of around US$16 500 per tonne but now we have gone beyond that, what we are waiting to see is the stabilisation of that price above that threshold which seems to be holding for now,” BNC managing director, Thomas Lusiyano said in an exclusive interview with Equity Axis on The Earnings Review show.

Global Nickel prices have continued to surge after hitting a seven-year record high in September 2021 to shoot above US$20,000 per ounce.

Lusiyano added that the smelter refurbishment is one of the projects that the Company is keenly looking at, to make sure that they increase the value delivered to shareholders.

According to Fitch Solutions, a top globally recognised data, research and analytics firm the nickel prices are expected to average US$16 500 a tonne in 2021 and US$16,540 in 2022 but rise above US$17,000 a tonne by 2023, with the uptrend to continue into 2025.

The World Bank, in its commodity forecast report, estimated that nickel prices will fall to a low of US$16 000 per metric tonne in 2022, but they expect that the average spot price for the commodity will grow after the correction to reach US$18 000 per metric tonne.

Meanwhile, the IMF’s metal cost, insurance and freight (CIF) report reviewed an expected rise from US$18000 per metric tonne to US$19 000 in 2026. Significantly IMF experts expect that the nickel CIF price will grow as the overall metal price declines.

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