Tuesday, March 03, 2009

Munali Nickel Mine stops operation

Munali Nickel Mine stops operation
Written by Chiwoyu Sinyangwe
Tuesday, March 03, 2009 12:22:43 PM

The country’s first Munali Nickel Mine has been shut indefinitely, the move is blamed on the current low metal prices on the international market.

According to mine sources, the country’s sole nickel mine last operated on fulltime basis last Monday.

“Mining will be suspended. However, limited development activities may recommence so that production levels greater than 900,000 tonnes per year (of ore) can be readily achieved when nickel prices improve,” Albidon disclosed in a statement obtained yesterday.

And in a separate statement to the Australian stock exchange, Albidon stated that the decision to suspend the joint venture nickel producer which was backed by Chinaís Jinchuan Group Limited was fueled by the collapse in nickel price which slumped 56 per cent since its July opening last year.

“Depressed nickel prices have made ongoing operations at Munali unsustainable,” Perth-based Albidon stated yesterday in a statement to the Australian stock exchange.

Market analysts who have described Albidon as ‘distressed’ are predicting that Zambian sole nickel miner would be forced into a more permanent suspension of trading if it cannot emerge from a trading halt yesterday morning.

Last Friday, Albidon failed to secure $US26 million (S $41 million) funding package that it needed to keep it out of administration had fallen through, but it was at an ‘advanced stage’ of negotiating a replacement deal.

It has yet to give any details about the structure or the terms that could be associated with the new proposal.

And mines minister Maxwell Mwale said the government had not by press time received a notification from management of Munali.

Mwale, however, confirmed that Munali Nickel mine has been going through liquidity problems.

“We expect them to have started having some revenue to come on stream now that they have started producing some concentrates but the biggest problem is the nickel price,” said Mwale.

Albidon shares, which peaked at $5.10 amid takeover interest last May, last traded at 7.2 cents.

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posted by MrK @ 12:23 PM

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