Bindura Nickel Corporation (BNC), a subsidiary of Mwana Africa, will issue a $20- million bond to help fund the restart of its Bindura nickel smelter, in Zimbabwe.
BNC last week published a prospectus in relation to the bond, which would have a five-year term and which was expected to close late in January. Mwana Africa would provide a parent guarantee for the bond.
BNC had also been granted Liquid Asset status by the Reserve Bank of Zimbabwe, which would require Zimbabwe banking and other financial institutions to invest a minimum percentage of their assets in the bond.
This was in addition to being granted Prescribed Asset status by Zimbabwe Finance and Economic Development Minister Patrick Chinamasa, last month. Zimbabwe asset managers were required to invest a certain minimum percentage of their assets under management into prescribed assets.
The proceeds of the bond would be used to help fund the restart of the Bindura smelter, which would enable BNC to produce a nickel leach alloy that was expected to improve the achievable nickel price and result in lower operating costs.
Mwana revealed in June that the smelter would likely resume operations in the first half of 2015. The estimated overall capital cost to restart the smelter was $26.5-million.
BNC planned to fund the balance of the restart costs from existing cash flows.
“We are pleased that BNC has published the prospectus in relation to the $20-million bond and look forward to updating the market on our progress over the coming months.
“We would like to thank the Reserve Bank of Zimbabwe, as, being awarded Liquid Asset status, allows BNC to widen [the range of] financial institutions that can support and participate in the bond, potentially increasing its liquidity and tradability. The restart of the smelter will allow in-country beneficiation and will provide significant benefits for BNC and Mwana,” commented Mwana CEO Kalaa Mpinga.