It is reported that majority owned Albidon's Munali nickel mine in Zambia, faced with a myriad of operational and financial problems, is pondering over its revival to remain competitive amid a the fall in metal prices.
Recently Munali nickel mine, lying about 60 kilometers South of Lusaka suspended operations in Mazabuka, for want of resources and failure to implement the strategic survival plan, leaving more than 2,000 workers in the cold.
However, inspite of all the odds, the mine is determined to ensure that it uses all resources at its disposal to restructure and make the company more efficient and profitable. One of its first tasks is to retain the workers on salary, despite being placed on care and maintenance while it consults various players to ensure it does not fail again despite various pressures.
According to a statement posted on the company website, the Australia Toronto listed Albidon Limited, said the suspension of the operations were prompted by the poor cash flow following the drop in nickel prices on the world market by about 23% over the last four months.
This was despite the company and shareholders agreeing on a survival plan to ensure the company were successful inspite of the shortcomings. Mines minister Wilbur Simuusa when contacted earlier stated that he was surprised at the decision by the company to shut down and that he had summoned all senior management officials and other interest parties to find a way forward.
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Chinese ambassador to Zambia Mr Zhou Yuxiao called for dialogue over the matter. According to acting Albidon Limited MD Mr Harry Ou Wang, after consultation with the Zambian mining authorities the company had decided to temporarily suspend operations because of cash flow problems.
Mr Wang said that "With the decline of global nickel prices by approximately 23% over the last four months and the less than budgeted nickel recoveries at Munali, the company has experienced serious cash flow difficulties." He added placing operations on suspension, would allow management use the scarce resources into restructuring the mine and making it more efficient.
The statement posted on the Albidon website, however, said it remained committed to pursuing all available opportunities to guarantee alternative finances.
Munali Nickel Mine has been plagued by a series of mining misfortune that were heightened by the discovery of underground sinkholes, leading to the suspension of operation of one part of the mine mid this year.
This has forced the operator to revise downwards, the year end production target twice from the initial 90 000 tonnes to 55,500 tonnes and later by about 21% to 44,000 tonnes in June 2011. In September 2011, Albidon announced the suspension of trading of shares at the ASX claiming the company had over announced the production levels of nickel.
Albidon announced the new downward revised figures which upset the minority shareholders. Nickel is used in many products including electric guitar strings, magnets and rechargeable batteries with its magnetic properties making it important for use in computer hard drives.
(Filed by Mr Kapembwa Sinkamba SteelGuru Correspondent Zambia)
