Bindura Smelter and Refinery

Following a technical review in 2014 and the granting of national project status by the Zimbabwean government, BNC decided to invest $26 million to restart its smelter. The restart of the smelter is being funded by a $20m bond and internal cashflow.

Smelter Restart (project overview)


The Smelter Restart Project is progressing well and as of January 2017, the project progress was 78% complete. The expected completion date is in the next financial year (1 April ’17 — 31 Mar ‘18). A considerable amount of refurbishment work and installation of new equipment is complete. The major highlights were featured in the Group's Q3 FY 2017 update and the scope of refurbishment is detailed below.

Nickel from the smelter is produced in the form of matte and the terms BNC can expect to secure for its matte varies according to prevailing market conditions. The higher the nickel price, the better the contract terms. The transport savings when moving matte as opposed to concentrate also need to be factored in, as it has approximately eight times less bulk. It is important to emphasise that the long-term strategic value of the smelter is when the nickel price is more elevated. Additionally, when prices are higher, third party toll feed tends to be in greater supply. While we are not dependent on any one of these factors to re-start the smelter, they nonetheless contribute to the revenue model. The formula for calculating revenue has many variables. BNC continues to explore discussions with third party nickel producers to add toll income over the medium-term when the smelter is fully operational. BNC will be able to offer more accurate guidance on net margins and operating costs when these variables become more predictable. In the meantime, BNC continues to explore conversations with third party nickel producers in the region. As the price of nickel recovers, more concentrate will come to the market and an off-take deal would improve margins.


Once the smelter is in full production, BNC’s percentage of the market price increases from the current c.65% to 85%, subject to contractual terms. The two key factors governing the marginal economic benefits of the smelter are the nickel price and the additional cost of electricity. The restart will save $10-12 million in transport costs. National project status also gives BNC access to a number of incentives, including duty-free import of capital equipment and value added tax rebates on certain equipment.


An operating cost estimate was developed based on historical efficiencies and current costs of materials, labour and projected power costs at BNC’s smelter. As the smelter throughput is limited by the run of a mine from the single concentrate source (Trojan), the furnace is required to be run in a turned-down state. As a consequence, the thermal efficiency of the furnace is lower. This results in an overall average smelter operating cost of US$251/t concentrate. Over 40% of this operating cost is derived from electrical costs. The current electrical pricing assumption by BNC is 10.3USc/kWh BNC’s average tariff for the past 6 months has been 6.9USc/kWhr based on the Commodity Price Linked tariff agreement between BNC and the utility supplier. BNC intends to renegotiate this agreement.

  • Crushing and Screening Plant – Structural work in the screening plant completed. Painting and installation of conveyor belts in progress.
  • Cooling Water System: Pipe bridges and pipework installation in progress. New BSR cooling tower received.
  • Electrostatic Precipitator Refurbishment – ESP and mixing chamber roof repairs in progress.
  • Converter No.1 shell and water jackets installed.
  • Furnace – Demolition work completed and all the bricks received from South Africa. Furnace rebuilding to start in November 2016.
  • Civil Work – Slag granulation launder, converter aisle plinths and bases completed.
  • Structural refurbishment and plant painting in progress.
  • Concentrates Handling Plant – Silo chutes modifications and stoker chamber repairs in progress.
  • New Feed System: Materials for construction of hoppers received and fabrication in progress.
  • Furnace Off Gas System: Materials for construction of ducting received and fabrication in progress.
  • Furnace Electrode Mechanical Seals: Manufacturing completed and ready for dispatching from South Africa.
  • Electrostatic Precipitator: 
    • Installation of dust conveyance system completed.
    • ESP and mixing chamber roof repairs in progress.
    • Instrumentation and electrical cabling work in progress. 
  • Punch cars: Manufacturing of the cars almost complete in South Africa and tuyere bodies designs completed.
  • Hogarths Engineering and Astra Paints currently onsite for structural refurbishment and painting respectively. 

  • Materials handling: Plant currently under refurbishment after being handed over to the project in May 2016 
  • Screening plant: Installation of decking plates and rollers on conveyors completed. Installation of conveyor belts to follow.
  • New GA250 commissioned in April 2016. 
  • New smelter substation switchgear commissioned in August 2016.
  • Low Pressure Air pipes and electrical cables installation completed.
  • New GA250 commissioned in April 2016. 
  • Water Jackets: 
    • All water jackets delivered and installation on converter No. 1 completed.
    • Installation on Converter No. 2 in progress.
  • Slag Pump House: Pump plinths & suction ports construction completed.
  • Extra Civil Works. Slag granulation launder and converter aisle plinths construction completed

  • Furnace demolition completed.
  • All furnace bricks, mortars and castables received.
  • Assembling of the rewound transformers at Nical Transformer Manufacturing (Pvt) Ltd is in progress and 3 of the 4 transformers were tested and passed.