Benzinga - by Stjepan Kalinic, Benzinga Staff Writer.
Zimbabwe’s sole operating nickel mine, the Trojan Mine, is insolvent.
What Happened: Zimbabwea’s government — which owns 70% of Bindura Nickel Corporation —appointed an administrator to oversee the restructuring of the Trojan Mine after a period of suspended production due to equipment failure and a precipitous decline in global nickel prices.
The global nickel market has undergone a shift since the highs of 2022. Initially, the war in Ukraine stoked fears of supply disruptions, sending nickel prices soaring to record levels exceeding $100,000 per ton. However, the market has since taken a sharp turn downwards. Currently, nickel prices hover around $19,000 per ton. Nickel prices are currently 25% lower than they were a year ago, mainly due to the oversupply from Indonesia.
Why It Matters: This instability has caused global producers to reassess their nickel businesses. In Australia, First Quantum Minerals has closed its Ravensthorpe mine, while BHP‘s unprofitable Nickel West is under threat of a similar fate as the company reviews its operations.
The Trojan Mine’s output plummeted in the last financial year due to equipment failure. The mine produced only 1,314 metric tons of nickel concentrate, down from 3,180 metric tons the previous year. This sharp decline occurred after operations were halted last September. The mine’s Sub-Vertical Rock Winder (SVR) bull gear failed during a seismic event, interrupting the hoisting of ore from underground.
Despite the recent installation of new equipment, Bindura announced that the restart of mining operations would be delayed due to low prices and high input costs like electricity.
Originally established in 1964 under Anglo American ownership and subsequently sold in 2003, the mine’s current predicament reflects the lack of capital investment that has become a chronic issue for many Zimbabwean mining companies. This capital scarcity hinders necessary upgrades and maintenance, ultimately limiting the ability to exploit abundant mineral resources.
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