Bindura Nickel works to revive operations amid deb...

Bindura Nickel works to revive operations amid debt woes

Nyashadzashe Ndoro

Chief Reporter

Bindura Nickel Corporation (BNC), a leading nickel producer in Zimbabwe, continues to undergo reconstruction efforts aimed at reviving its operations and settling its debts

BNC, a member of Kuvimba Mining, was placed under reconstruction due to its inability to service its debts. The company, which is listed on the Victoria Falls Stock Exchange (VFEX), has been struggling to pay its debts, including those owed to the government.

In May 2024, the government issued a reconstruction order against Trojan Nickel Mine Limited (TNML), a wholly-owned subsidiary of BNC. The order, which was issued under the Reconstruction of State-Indebted Insolvent Companies Act, aims to revive the company's operations and settle its debts.

According to a statement released by the company on Thursday, the reconstruction order was necessitated by BNC's failure to pay its debts, including those owed to the government.

Five months ago, the company's acting finance director, Simon Masvipe, noted that BNC's debts had become unsustainable, prompting the government to intervene.

"The reconstruction of BNC requires a temporary suspension of trade in its securities," Masvipe said.

"From May 6, 2024, in compliance with section 8 of the Securities and Exchange (VFEX Listings Requirements) Rules, 2020 and the Reconstruction Act, the trading of BNC securities was suspended by the VFEX Listings Committee."

As part of the reconstruction process, the administrator, MMJ Remba, has been tasked with conducting investigations into the company's operations and finances. The administrator will also engage with creditors and shareholders to present a plan for the reconstruction of the company.

BNC's financial woes have been exacerbated by low nickel prices on the global market. The company has been struggling to stay afloat due to high input costs, particularly electrical expenses, and substantial mining depth.

In its trading update for the quarter ending December 31, 2023, BNC noted that nickel prices remain subdued in the global markets, reaching economically unsustainable levels for the business.

The reconstruction of BNC is expected to be a lengthy process, with the administrator expected to share the proposed dates for the first meetings of creditors and members of the company and TNML in due course.

The development comes as the Zimbabwean government continues to grapple with the challenges of reviving the country's economy. The government has been working to revive several state-owned enterprises, including Kuvimba Mining, which are critical to the country's economic recovery.