Mwana Africa shuts Zimbabwe nickel mines

Mwana Africa has shut its nickel mines in Zimbabwe due to low nickel prices and operating problems.

LONDON (Reuters) - 

African mining firm Mwana Africa Plc said on Wednesday it had shut down its nickel mines in Zimbabwe due to low prices and operating problems.

Mwana Africa's majority-owned unit, Bindura Nickel Corp (BNC), has decided to place the Trojan and Shangani mines on care and maintenance with immediate effect, the company said in a statement said.

BNC is the only integrated nickel mine, smelter and refinery operation in Africa.

Under "care and maintenance", the infrastructure of a mine is kept up to enable the operation to restart at a later date if conditions improve.

The smelter and refinery operations will be placed on care and maintenance once its stocks have been depleted, the company said.

"Discussions with stakeholders are continuing, to put in place measures to mitigate the effects of declining nickel prices, low production levels, unfavourable exchange rates and periodic power blackouts, which have undermined the viability of BNC's operations," Mwana Africa said.

Bindura was also looking into the possibility of resuming production at the smelter and refinery by treating third-party material, it added.

BNC's own nickel production last year fell by 26 percent to 4,200 tonnes while overall nickel production, including smelting and refining outside feedstock, declined 17 percent to 7,422 tonnes.

The operation has a capacity of 14,500 tonnes a year. (Reporting by Eric Onstad; editing by Karen Foster)

© Thomson Reuters 2008 All rights reserved

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