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BNC upbeat about 2022 on bright global outlook

BNC upbeat about 2022 on bright global outlook

Bindura Nickel

BINDURA Nickel Corporation (BNC) is bullish about prospects for significant growth in nickel sales and revenue next year, citing strong global demand, amid falling stocks, among the major reasons.

This comes after Africa’s only integrated nickel miner, for the six months to September 2021, registered a marginal 0,27 percent in sales to 2549 tonnes from 2 556 tonnes over the prior comparable period last year.

This is despite a 15 percent growth in nickel ore milled tonnes to 241 325 from 209 153, attributable to the newly introduced approach of low-grade high volume strategy which moves away from high-grade low volume strategy.

The decline in nickel sales came at a time when global nickel prices jumped to reach a sevenyear high of $18 234 per tonne translating to a 38 percent growth from the prior year’s US$13 214 per tonne.

During the period under review, there was a jump in global nickel demand driven by a 142 000 tonnes deficit recorded in the first eight months of the year.

According to the Bindura Nickel Corporation, LME nickel inventories continued on a downward trend, dropping to 162 690 tonnes at the end of September 2021 compared to 259 182 tonnes at the start of the financial year.

Nickel in concentrate production for the half-year to September 2021 was 2553 tonnes, 13 percent lower than 2 929 tonnes realised in the same period last year attributable to head grade of 1, 26 percent which was 22 percent lower than 6 months to September 2020.

In the statement accompanying the group’s financials BNC chairman Muchadeyi Masunda said growing global demand for nickel would undoubtedly stimulate the price increase of the commodity.

He further stated that the demand was likely to persist given the growing production of electric vehicles across the world given the growing momentum coming from the growing reliance on electric vehicles.

“Falling stocks and rising energy costs are expected to result in higher prices going into the next half of the year.

“Fundamentals are strong and supportive of a nickel price increase. The International Nickel Study Group (INSG) 2021 reports that the nickel market was in a 142 000 tonne deficit in the first eight months of the calendar.

“Nickel demand from electric vehicles remains high as electric vehicle production and sales in China and Europe reach record high,” said Mr Masunda.

Nickel prices rose to a seven year high, climbing to $20 600 per tonne on September 17, 2021, supported by unanticipated strong demand as the Chinese stainless steel producers ramped up production ahead of the government-sanctioned output cuts, due to power rationing.

The September 2021 seven-year high was however, surpassed by the October 21 2021 price of $20, 530 per tonne.

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In the period under review, BNC reported a 41 percent revenue jump to US$35,3 million from US$25 million in 2020 on the back of improved global nickel prices while profit from operating activities improved by 31 percent to US$6,2 million compared to US$4,7 million in the first half of last year.

The period saw a 120 percent rise in administrative costs to US$3,3 million from US$1,6 million for the period attributable to an increase in wages and salaries, increase in Intermediated Money Transfer Tax and bank charges as well as Shangani Mine care and maintenance costs.

BNC acknowledged the threat of a resurgence of Covid-19, persistent foreign currency shortages, the widening gap between the auction and unofficial exchange rates as well as the potential of an increase in the already high inflation rate will pose serious threats to continued growth and economic stability.



The Herald

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