eBusiness Weekly
Taurai Mangudhla
Bindura Nickel Corporation says it will soon approach local banks to negotiate for $6 million funding facilities it requires to complete the reconstruction of its Trojan Nickel Smelter.
Managing director Batirai Manhando said the Zimbabwe Stock Exchange listed company expected to secure the funding facilities by the end of this month.
Work on the smelter was originally scheduled for completion in May last year, but missed the deadline, as it had been stagnant for six months, largely due to cash flow constraints, Manhando told The Business Weekly on the sidelines of the African Mining Indaba in Cape Town on Tuesday.
When fully operational, the smelter will have capacity to produce 160 000 tonnes of matte per month.
“The smelter is 83 percent complete. It has not moved for some time because of cash flow constraints, it has been stagnant for the past six months,” Manhando said.
“But we need about $6million to complete that project. The nickel prices, have improved significantly so we now hope to be able to generate enough cash to do that,” he said.
“We are working on some facilities with local banks so that we can complete that project. As the price continues to rise, it makes more sense to think about a smelter line.
“(At some point) it did not make any sense because of the high power tariffs and the low prices.
“We will conclude (the funding facilities) in the next month or so. It is almost done, I think it is just left with board ratification which we will do by the end of this month,” he added.
The BNC MD said he had spoken with a lot of potential nickel buyers and distributers as well as suppliers in terms of inputs to the business during the Mining Indaba.
“There were a lot of meetings yesterday and even today that I lined up with these companies to try and talk further about doing business together.
“Right now, there is a lot of interest in our country and companies that produce nickel from as far as Japan and China where consumption is high are keen on Zimbabwe.”
BNC reported an 83 percent leap in after tax profit to $2,2 million in the first half of the financial year ended September 30 driven by growth in other income.
The company’s revenue grew by 7 percent to $24,1 million while cost of sales jumped 13 percent to $16 million. Other income for the period doubled to $1,1 million on account of receipts from Government’s export incentive.
According to the company, Government pays them 2,5 percent of their revenues as an export incentive.
Although gross profit largely remained flat, gross margins improved by 3 percentage points to 36 percent on account of firming nickel prices on the global market. Total operating profit rose 54 percent to $3, 4 million.
Gross production volumes only went up 1 percent.
BNC said total equity grew 5,5 percent year on year while current liabilities went up by $1,2 million to close the period at $31,2 million largely driven by an increase in trade payables.
An increase in inventories and trade and other receivables inspired a 1,7 percent in current assets.
