The management of the KNS nickel plant, one of three located in New Caledonia, announced on Friday July 26 the dismissal of its 1,200 employees at the end of August, due to the lack of a “finalized offer” from a buyer.
In serious financial difficulty, with a colossal debt of 13.5 billion euros, Koniambo Nickel SAS has been looking for a buyer since the departure last February of the Anglo-Swiss group Glencore, its main shareholder (49%).
“While the process of finding a buyer continues actively and three groups continue to show interest in our company,” KNS explained in a statement, “we have neither a finalized offer nor visibility on the financing of the operations.” “Consequently, we are forced to continue the process of collective redundancies for economic reasons,” KNS added.
The search for a buyer continues
According to management, the layoff of the company’s 1,200 employees will be effective on August 31. Only about fifty of them will remain active beyond that to “ensure that the site remains in cold standby mode.” The KNS site, one of the main employers in this French territory in the South Pacific, also used subcontractors, employing some 500 people.
Glencore had agreed to finance salaries until the end of August in order to allow a so-called “warm” standby of operations, guaranteeing a rapid resumption of activities in the event of a takeover. The company assured this Friday that the decision to lay off almost all of the workforce “does not call into question the process of finding a new economic partner”.
A crisis that affects the entire archipelago
KNS’s debt was until now entirely assumed by Glencore, under the terms of the shareholders’ agreement which linked the group to the Société minière du Pacifique Sud (SMSP), owned by public interests representing the pro-independence community of the Northern Province.
New Caledonia is suffering the full force of the global nickel crisis and the territory’s two other factories are also threatened with closure. Located in the south of the archipelago, Prony Resources is completely at a standstill, while SLN, in Noumea, posted a net loss of 72 million euros in the first half of the year, according to figures presented this Thursday by its main shareholder, the French group Eramet.
These difficulties are aggravated by the insecurity that has reigned in the archipelago since mid-May and which disrupts the supply of ore and the access of employees to many sites. These riots, provoked by the vote on a draft reform of the electoral body to which the separatists are opposed, caused the death of 10 people, including two gendarmes, and considerable material damage to the infrastructure of the archipelago for a total amount estimated at more than 2 billion euros.