Mwana Africa to Spend US$26m on Re-opening Zimbabwe Nickel Smelter
Some US$26.5million is to be spent on restarting a Zimbabwean smelter after nickel prices soared following a ban in January of Indonesian exports.
The Bindura Nickel Corporation (BNC), which operates the smelter, hopes to have its operation up and running by the first half of 2015.
Parent company, AIM-listed Mwana Africa announced the decision to reopen following the conclusion of an independent study, which found it to be both a beneficial and viable option.
The study carried out by Hatch Goba also found that as well as financial benefits, restarting the nickel smelter would lower transport costs and enable higher revenues through the sale of higher-value nickel leach alloy.
Half of the capital costs are expected to be funded through debt finance while the rest will be met by BNHC’s cash flow and company cash balances.
Kalaa Mpinga, Mwana Africa’s Chief Executive, said: “I am pleased to announce completion of the independent study of the accelerated smelter restart plan. This paves the way for us to capitalise on the opportunity presented by a favourable nickel market.
“We can grow our revenue stream by moving rapidly up the value chain from current production and sale of concentrate, with the associated transportation saving cost of this, to production and sale of higher value nickel leach alloy.
“This study outlines the costs and key milestones required to restart the smelter, and we look forward to updating the market on financing and development of the accelerated smelter restart plan as it evolves over the coming months.”
While Indonesia is planning new investments in nickel smelters, this is anticipated it will take some time before coming to fruition.
Mwana Africa is a pan-African resources company and also has operations in South Africa. It also has a broad range of exploration projects and interests in the Democratic of Congo, Angola, Ghana and Botswana. Its diverse asset base includes gold, nickel, copper, cobalt and diamonds.
