Victoria Falls Stock Exchange (VFEX) listed mining giant, Bindura Nickel Corporation (BNC), is expecting nickel prices to be higher for the remainder of 2022 due to increasing demand for battery grade Nickel in electric vehicles, Bkays Money can report.
Speaking in a trading update for the quarter ended 30 June 2022, the company secretary Mr Conrad Mukanganga has said nickel prices are expected to be bullish for the remainder of calendar year 2022.
“The London Metal Exchange (LME) average Nickel prices are expected to strengthen due to optimism surrounding the easing of lockdowns in China and an anticipated resultant improvement in economic activity, as well as the increasing demand for battery grade Nickel in electric vehicles,” he said.
For the quarter ended 30 June 2022, the average LME Nickel price of $29,029 per tonne was 67% higher than the price of $17,343 per tonne which was achieved in the comparative period in the previous year. The price improvement was attributable to the global high demand for Nickel.
Recent data for the electric vehicle market has shown that there is an increasing demand of EVs in the market thus more manufacturing taking place which will raise demand for Nickel as well.
“Sales of electric vehicles (EVs) doubled in 2021 from the previous year to a new record of 6.6 million. Back in 2012, just 120 000 electric cars were sold worldwide. In 2021, more than that many are sold each week. Nearly 10% of global car sales were electric in 2021, four times the market share in 2019,” reads the Global EVs outlook for 2022.
However, for BNC, Nickel in concentrate sales for the period were 14% lower than for the same period last year.
“The sales decreased due to a delay in the renewal of the off-take agreement, which expired in early March 2022. A new two-year contract was signed in early April 2022 and export shipments resumed in the following month.As a result of the disproportionately high operating costs, the Company incurred a loss for the quarter,” he said.
To meet the expected demand for the last quarter of 2022 and increase production, BNC said the acquisition of new underground mining mobile equipment to replace the old and unreliable units is under way.
“In addition, while awaiting delivery of new equipment, the Company is complementing the current fleet by hiring equipment from different service providers. Both the new and hired mobile equipment is expected to increase the availability of equipment and ultimately increase production,” said Mr Mukanganga.