In New Caledonia, Glencore puts its nickel plant on hold

In New Caledonia Glencore puts its nickel plant on hold

Glencore announced this Monday that it would mothball the Koniambo Nickel SAS (KNS) ferronickel production plant in New Caledonia and seek a new industrial partner. The Swiss group believes that these activities are “not profitable” despite the French government’s proposals.

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Poor yields, rising energy costs, strong foreign competition… The KNS factory, a flagship project for economic rebalancing between the North and South provinces of New Caledonia, has 14 billion euros in debt. A financial loss which is simply not viable for Glencore, which owns 49% of the factory, the rest being held by the Northern province of the French Pacific archipelago.

In recent weeks, the State has nevertheless negotiated with the Swiss group. In total, more than €200 million in aid has been offered to keep the site open. Bercy hoped for an agreement by the end of the month. But the check is not enough for Glencore, which cites the poor health of the nickel market, whose prices are at their lowest for two years. The Swiss group believes that it cannot “ not continue to finance losses to the detriment of its shareholders » and therefore made the decision to place these activities in upkeep and maintenance operations.

For now, the 1,300 employees are keeping their jobs and the ovens remain hot. We now need to find a buyer. French Economy Minister Bruno Le Maire said he was ready to support the research. The closure of the three factories would be synonymous with a major social crisis in the archipelago, where the nickel sector is by far the largest private employer.