JOHANNESBURG (miningweekly.com) – Following the completion of an independent study of an accelerated restart plan for Aim-listed Mwana Africa’s 76.3%-owned, subsidiary, Bindura Nickel Corporation’s (BNC’s) nickel smelter, in Zimbabwe, the company on Wednesday announced that the smelter was expected to resume operations during the first half of next year.
The study, which represented a technical and economic assessment of the potential refurbishment and restart plans of the smelter complex, also estimated the overall capital cost to execute the restart would amount to $26.5-million.
Mwana said that about half of the capital cost would be funded through debt finance, with the remainder to be financed from existing BNC cash flow and Mwana cash balances.
Once operational, the smelter was expected to start contributing to the company’s cash flows during 2016, with its operating cost having been estimated at $251/t of nickel concentrate.
Mwana noted that the installed power for the furnace was 14 MW, with concentrate output expected to be about 160 000 t/y.
Therefore, as concentrate production from the company’s Trojan mine, also in Zimbabwe, was expected to be about 106 677 wet metric tons a year, the smelter would have spare capacity to treat third-party material, Mwana said.
“The [smelter restart plan] 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 to production and sale of higher value nickel leach alloy,” Mwana CEO Kalaa Mpinga commented.
The company also pointed out that additional opportunities existed for Mwana beyond the smelter restart.
These included potential to increase volumes through the development of BNC’s Hunters Road mine project at a later date, investing in the adaption of the smelter to treat platinum-group metals (PGMs) and restarting the BNC refinery – which was currently on care and maintenance – to allow it to treat nickel leach and PGMs.