Munali Nickel delays resumption of underground production By

[bingogo]

Munali Nickel delays resumption of underground production
By Chiwoyu Sinyangwe
Wed 18 Nov. 2009, 04:00 CAT [36 Reads, 0 Comment(s)]


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MUNALI Nickel Mine has delayed resumption of underground production after shareholders approved the refinancing deal with Jinchuan Group of China, care and maintenance manager Shaun Vokes said yesterday.

In an interview, Vokes said the mine, which was set to resume output this month would start with underground production next month while the processing plant for nickel was scheduled to start operations in January next 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.

"The processing plant is going to restart in January while the underground operations recommences in December," Vokes said. "We obviously have to allow the contractor to mobilise the site."

He said the shareholders meeting on October 30 approved the new financing arrangement to deal with the mine's external creditors which allowed the company to be taken over by Jinchuan Group.

"Basically what that meeting did was to approve the financing transaction with Jinchuan," he said.

Vokes said the mine was expected to clinch working capital for final operationalisation.

The mine closed in the first quarter of this year at the height of the global economic recession which depressed the commodity prices.

"By the end of this month, we expect the working capital facility to be reached with one of the commercial banks in China," Vokes said. "It is not yet certain but we are working around US $30 million."

Vokes, however, did not name the Chinese commercial bank expected to provide the crucial financing bridge.

Last September, Barclays Bank Zambia Plc said Jinchuan Group had secured a US $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 said.

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, located in southern Zambia, had forecast production of 10,000 tonnes of nickel each year before its shutdown.

[Clint]

Zambia nickel mine to delay output until 2010
Fri Nov 20, 2009 10:45am GMT


LUSAKA (Reuters) - Zambia's Chinese-owned Munali nickel mine will delay restarting production to early 2010 from October due to negotiations over working capital with a Chinese bank, a senior company official said on Friday.

Maintenance manager Shaun Vokes said Munali, which had forecast to produce 10,000 tonnes nickel this year, before it was shut down in March owing to weak metal prices, would only resume underground mining operations in December.

Vokes said a shareholders' meeting held in October approved a separate plan for refinancing, which was being arranged by China's Jinchuan Group, the new owners of Munali, after Australia's Albidon Ltd suspended operations at the mine before pulling out.

"By the end of this month, we expect the working capital facility to be (agreed) with one of the commercial banks in China. It is not yet certain but we are working around $30 million," Vokes told Reuters, but declined to name the bank.

"The processing plant is going to restart in January."

Albidon halted operations at the southern African country's only nickel mine following a fall in metals prices, which it said had made operations unsustainable. .

In September, Barclays Bank Zambia Plc said that Jinchuan Group had secured a separate $12.6 million facility from the bank to purchase underground mining equipment.

Barclays said the funds would also help Jinchuan, which has a 70 percent stake in the mine, 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.

Zambia, Africa's largest copper producer, has also started to woo foreign investors to mine for other minerals like nickel and uranium and this week selected foreign and local firms to explore for oil as it diversifies from mining. .

http://af.reuters.com/article/investing ... 29&rpc=401