Still suffering from depressed base metals prices, BCL experienced another disaster towards the Christmas break when nickel solidified inside the furnace leading to the company stopping metal production indefinitely.
According to those who work close to the smelter, there was pressure on the furnace as larger amounts of ore were put for processing leading to the blockage of the furnace.
The halting of production led to the company losing millions of Pula as a result of the stock piling of ore and lost revenue from Tati Nickel, which processes its ore at BCL. Other estimates say that this might have cost the company around a billion Pula to overhaul, repair and service the smelter.
BCL said this week that the flash smelting furnace has been offline since December 3 leading to zero metal production. However, during the breakdown, the mine says ore and concentrate production operations were still running normally with concentrate being stored in the paddocks.
┬á“This was caused by a massive fall of buildup/accretions around the uptake shaft of the flash smelting furnace,” BCL said this week.
┬á“The fall caused a complete blockage of the off-gas passage into the waste heat boiler and ultimately to discharge through the main stack. With no way to exhaust the furnace reaction gases, there was no alternative but to suspend feed into the furnace and clear the blockage.”┬á
BCL insiders say this is the first time such an incident has happened in the history of the mine leading to questions of poor management and the efficiency of the foreigner who heads the smelter unit.
The Flash Smelting Furnace underwent major overhaul in June/July, 2007 and had the smelter not had a breakdown it would have functioned for 7 years without service.
Total metal production (including metal from third party concentrates) is just over 5 000 tonnes per month of combined nickel and copper.
“The lack of metal production is impacting on our cash flow but Ore Production and Concentrator continue operating and storing concentrate in paddocks designed for this purpose,” BCL said in response to Sunday Standard enquiries.
“It is expected that the deferred revenue will be recouped when the stored concentrate is reclaimed and processed together with new concentrate. The flash smelting furnace has adequate capacity to smelt both new and reclaimed concentrate.”
The breakdown comes at a time when BCL is under duress from the slump in metal prices that will force the company to use its P3 billion cash reserves made during high metal prices.
The fall in metal prices has forced the company to slash workforce by almost 10% or about 380 employees to reduce costs so that the mine does not close down as others do during hard times.
“I do not think that any business can rule out any retrenchments under the current situation,” BCL General Manager, Montwedi Mphathi, said recently.
┬á“We have to look at deficiencies although our aim is to keep people employed.”
Labour expenditure accounts for 40 percent of BCL’s total costs.