HomeBase MetalsMunali nickel mine to delay production

Munali nickel mine to delay production

Ore from the Munali
mine is processed
through a conventional
flotation concentrator,
with a crushing circuit
Lusaka, Zambia — MININGREVIEW.COM — 20 November 2009 – Zambia’s Chinese-owned Munali nickel mine has announced that it is to delay restarting production until negotiations over working capital with a Chinese bank have been completed in early 2010.

Maintenance manager Shaun Vokes said here originally that Munali “’ which had forecast that it would produce 10 000 tonnes of nickel this year, before it was shut down in March because of weak metal prices “’ would only resume underground mining operations in December.

Vokes said a shareholders’ meeting held in October had approved a separate plan for refinancing, which was being arranged by China’s Jinchuan Group, the new owners of Munali, after Australia’s Albidon Limited had 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 at around US $30 million (R225 million),” Vokes told Reuters. He declined to name the bank.

“The processing plant is going to restart in January,” he added.

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 revealed that Jinchuan Group had secured a separate US$12.6 million (R94 million) facility from the bank to purchase underground mining equipment. Barclays said the funds would also help Jinchuan, which has a 70% stake in the mine, to start to manage 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.

Reuters reports that 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.