Congo Resources

[Berliner]

We're Still Viable Despite Nickel Price Drop - BNC

BNC = MWANA

The Herald (Harare)
NEWS
17 August 2007
Posted to the web 17 August 2007
Harare

Bindura Nickel Corporation (BNC), the country's main nickel producer, said yesterday that it was still viable despite a sharp price drop for the commodity on the international markets in the last two months.

Nickel prices have retreated from highs of US$50 000 per tonne two months ago to around US$29 000 a tonne now, a tumble suspected to have been caused by mass offloading of stocks by some big international merchants.

BNC managing director, Mr David Murangari said the price drop was expected to be temporal, and forecast nickel prices to start firming later in the year.

But he said even at current price levels, BNC was operating viably and could comfortably absorb a further drop to around US$25 000 per tonne. This was, however, unlikely as demand in key nickel markets such as China and India remained strong and growing.

"The price has gone down a bit but we are okay here. I think most producers are still okay, besides this is a temporal dip that we are experiencing," he said.

Mr Murangari said the company, which operates nickel mines in Bindura and Shangani, expected to producer 6 500 tonnes of the commodity this year.

He said output was expected to start rising from next year when two shaft deepening projects, to allow the company to access ore at deeper levels, are completed.

BNC is investing around US$10 million in the projects being carried out at both Binduara and Shangani mines.

This will be further boosted in the first half of 2009 when BNC's US$100 million Hunter's Road project near Kwekwe comes on stream.

The company expects to be in prodWe're still viable despite nickel price drop: BNC

Bindira Nickel Corporation (BNC), the country's main nickel producer, said yesterday that it was still viable despite a sharp price drop for the commodity on the international markets in the last two months.

Nickel prices have retreated from highs of US$50 000 per tonne two months ago to around US$29 000 a tonne now, a tumble suspected to have been caused by mass offloading of stocks by some big international merchants.

BNC managing director, Mr David Murangari said the price drop was expected to be temporal, and forecast nickel prices to start firming later in the year.

But he said even at current price levels, BNC was operating viably and could comfortably absorb a further drop to around US$25 000 per tonne. This was, however, unlikely as demand in key nickel markets such as China and India remained strong and growing.

"The price has gone down a bit but we are okay here. I think most producers are still okay, besides this is a temporal dip that we are experiencing," he said.

Mr Murangari said the company, which operates nickel mines in Bindura and Shangani, expected to producer 6 500 tonnes of the commodity this year.

He said output was expected to start rising from next year when two shaft deepening projects, to allow the company to access ore at deeper levels, are completed.

BNC is investing around US$10 million in the projects being carried out at both Binduara and Shangani mines.

This will be further boosted in the first half of 2009 when BNC's US$100 million Hunter's Road project near Kwekwe comes on stream.

The company expects to be in production at the new mine, where vast nickel reserves have been found, after next year.