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BNC Turnover Soars As Nickel Prices Hold Steady

Listed- nickel producer, Bindura Nickel Corporation (BNC) posted an eight percent increase in turnover for the nine-months to December 2020 sustained by firmer prices for the silvery-white metal.

The average London Metal Exchange (LME) cash settlement price for the quarter ended 31 December 2020 rose by 4  percent to US$ 15,940.82 per tonne  in comparison to the price of US$ 15 371.17 per tonne in the corresponding quarter in 2019.

There were fears that prices could plummet with the advent of the COVID-19 pandemic early in the year but instead, the global market stood bullish.

“The year-to-date turnover increased by 8 percent when compared to the corresponding period in the previous year, in line with the improved LME nickel prices,” the company said in its third quarter trading update.

Nickel-widely used to make stainless steel and other alloys stronger to withstand extreme temperatures and in batteries had its price firm in response to a number of bullish factors, including the confidence in the recently elected Joe Biden administration in the USA, the approval and subsequent roll-out of the COVID-19 vaccine, as well as the sizeable growth in the Chinese stainless steel and electric vehicle (EV) sales.

BNC sold 1 864 tonnes of nickel in concentrate in the quarter to December, which was 20 percent higher than the sales tonnage achieved in the quarter ended 31 December 2019. The sales performance was in sync with the improved production during the same period.

“Tonnes mined increased by 9 percent to 116 525 as the mine recovered from the effects of the slowdown induced by the COVID-19 lockdown in April and May 2020,”

“Similarly, tonnes milled increased 9 percent when compared to the corresponding period last year, in line with the increase in tonnes mined,” said BNC.

Capital expenditure for the nine months was US$4.7 million compared to US$4.6 million spent in the comparative period in 2019. During this reporting period Trojan Nickel Mine took delivery of an underground production drill rig and loading equipment which will lead to improved production performance.

The Company is not anticipating an improved operational and financial performance for the quarter ending 31 March 2021 due to a planned short production stoppage that is intended to facilitate the Trojan Shaft Re-deepening tie-in Project.

Once completed, the company expects to ramp up production to more than 60 000 tonnes of ore per month.

Price of nickel is expected to hold steady in the interim although analysts suspect the market might have outpaced key fundamentals and prices are likely to take a downward correction in the medium term.

The International Nickel Study Group predicts a 200 000 tonne increase in demand for refined nickel as well as a supply surplus of 68 000 tonnes for the year 2021.

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