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. .