Mon, Feb 12th 2024
Glencore announces a six-month wind-down of Koniambo Nickel financing, shifting to maintenance mode while exploring new partnership opportunities amidst unprofitability and market challenges.
Glencore, the global commodities trader, has decided to stop financing Koniambo Nickel SAS (KNS) after another six months. This period will see the nickel mine transitioning into a maintenance phase.
The company commits to retaining local employees for a smooth transition. This move follows extensive discussions with the government and stakeholders. Despite the French government’s support, Glencore cites high operational costs and weak nickel market conditions as critical factors for KNS’s lack of profitability. Consequently, Glencore cannot justify continued financial losses to its shareholders and is looking for a new industrial partner for KNS.
The announcement marks a significant shift for what was once a flagship project aimed at economic parity between New Caledonia’s North and South provinces. Launched a decade ago, KNS, with a workforce of around 1,350, has struggled to achieve profitability.
Glencore, holding a 49% stake in KNS, alongside Société Minière du Sud Pacifique SA’s (SMSP) 51%, has invested a staggering USD 9 billion into KNS through Xstrata and subsequently Glencore. The search for alternative financing solutions underscores the project’s critical juncture and the broader challenges the nickel industry faces.
©Keystone/SDA
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