Ven 25 Sep 2009 20:51
Zambia's Munali nickel mine
Shaun Vokes, Munali's care and maintenance manager, said Jinchuan Group of China will restart operations at the end of October or early November, after taking over the mine from Albidon Ltd (ALB.AX: Quote) (ALDq.L: Quote), which had placed it on care and maintenance in March this year.
Albidon suspended operations at the mine -- Zambia's only nickel mine -- following a fall in metals prices, which it said had made operations unsustainable.
Barclays Bank Zambia Plc said in a statement seen by Reuters on Friday that Jinchuan Group had secured a $12.6 million facility from the bank for underground mining equipment.
Vokes said the funds would help the re-opening of the mine.
"With this re-financing arrangement for existing underground equipment, we expect the mine to resume operations late October or early November," he told Reuters.
Vokes said the Jinchuan Group was now trying to arrange finance for working capital before resuming operations at the mine.
Barclays said the funds would also help Jinchuan to start to manage both its production capacity as well as to meet its financial obligations.
Ore production at Munali in the first two months of 2009 was 74,000 tonnes, below the forecast 87,000 tonnes, mainly due to a lack of equipment and lower grades.
Munali mine, in southern Zambia, had forecast production of 10,000 tonnes of nickel each year before its shutdown. (Editing by Shapi Shacinda)