The billionaire Forrest family has tipped another $31 million into its privately held Australian nickel business amid expectations it will burn cash and face an impairment.
Andrew and Nicola Forrest’s private Wyloo vehicle paid more than $700 million to acquire Mincor Resources last year, but has already been forced to announce closure of the mines following a significant slump in the nickel price. Mincor was also affected by product quality issues linked to higher than expected arsenic levels in the nickel ore.
These issues dragged Mincor to an $89.9 million loss for the year to June, with total cash outflows rising to $113.4 million once spending on investments was included.
Accounts filed to the Australian Securities and Investments Commission show Mincor has had to seek covenant relief from its lender, BNP Paribas, and is expected to burn cash this year. “Management has prepared a cashflow forecast for the period ending December 31, 2024, which indicates additional funding of approximately $30 million will be required progressively between January 2024 and December 2024,” they read.
For the rest of this article: https://www.afr.com/companies/mining/forrests-forced-to-prop-up-struggling-nickel-business-as-prices-slide-20240206-p5f2wg