The large group specializing in raw materials Glencore announced, Wednesday, September 27, its withdrawal at the end of February 2024 from the ferronickel production plant, Koniambo Nickel SAS (KNS), “if no new financing solution was identified “. A 49% shareholder in KNS, the Glencore group, based in Switzerland, is the sole financier.
The plant was commissioned in 2014 and currently employs 1,350 people. A flagship project in the rebalancing between the North Caledonian provinces – where it is located – and the South, KNS has never been profitable and has an abysmal debt. The site is today one of three metallurgical companies in New Caledonia in financial difficulty.
Nickel, long the economic lifeblood of the island, is today running out of steam. While the prices of strategic raw materials are increasing sharply on world markets, the three Caledonian nickel refining plants are weighed down and their survival is threatened due to their lack of competitive production costs, according to an official report published in August 2023 .
“While significant progress has been made in productivity, performance and reliability, KNS continues to struggle financially and incur significant losses, largely due to factors beyond its control related to cost structure and market conditions,” Glencore underlined in a press release published on Wednesday.
The group therefore “informed the KNS board of directors that it would only finance KNS operations until February 29, 2024.” Until then, Glencore “will work with KNS and relevant stakeholders to explore solutions for the continued losses” of the plant, “including seeking an alternative source of financing.”
Fifth world producer of nickel
New Caledonia is the world’s fifth largest producer of nickel, which represents 90% of the territory’s exports and 10% of its gross domestic product (GDP).
Kanak mining nationalism is inseparable from the political struggle for independence. The agreements of Matignon, in 1988, and Nouméa, in 1998, were the founders of a policy of economic rebalancing between the provinces of the South, predominantly loyalist, and the North, predominantly pro-independence, by providing the latter with a factory of ferronickel production, Koniambo Nickel SAS (KNS).