Swiss mining giant Glencore said Monday it is seeking a buyer for its stake in New Caledonian nickel mine and processing plant Koniambo Nickel (KNS) as the industry endures a price slump.
Glencore said it “appreciates the efforts of the French government to revitalise and save the nickel industry in New Caledonia.”
But it explained that, even with proposed levels of assistance from Paris, it was an “untenable activity” to keep in operation a high-cost plant saddled with debts of some 14 billion euros and employing 1,300 as a major employer in the area.
Recent years have seen nickel prices sag, hitting the market for mining firms in the French territory of New Caledonia, a tropical archipelago in the Pacific whose economy is hostage to the metal’s fortunes.
The Swiss group, which runs a facility that began production in 2013 as a joint venture with Societe Miniere du Sud Pacifique (SMSP), said it could not continue to finance the plant at a loss “to the detriment of shareholders” and plans a six-month winding down period.
The price of nickel — essential to the manufacture of stainless steel — is currently trading near three-year lows of around $16,000 a tonne as part of a broader downward trend in base metals.
