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Major miner Glencore has announced that it will only provide funding for the operations of its joint-owned Koniambo Nickel SAS (KNS) business until 29 February 2024.

Glencore owns 49 per cent of KNS, with the remaining 51 per cent owned by SMSP. The mine is located in New Caledonia.

The decision to stop funding KNS was made it light of the mine’s financial challenges

During the period between now and February 2024, Glencore will work with the mine and its stakeholders to explore solutions for the losses and look for an alternative source of funding.

“At this time, we anticipate activities on site will continue as normal,” Glencore said in a statement.

“Glencore will continue to provide financial support during this period, according to the budget, and remains committed to ensuring that KNS operates safely, maximising production and reducing costs.”

Glencore’s funding of KNS to date has totalled US$3.9 billion which has gone toward building capacity in the local workforce and developing a contractor ecosystem.

“While significant progress has been made in productivity performance and reliability, KNS continues to struggle financially and incur significant losses largely due to factors outside of its control relating to cost structures and market conditions,” Glencore said.

“A recent report from the French Inspector General of Finance (IGF) into the nickel industry in New Caledonia acknowledged the significant challenges experienced by the industry, including KNS, as well as the need for far reaching changes to address these challenges and make the production of nickel on island viable.”

Glencore said it would continue to work with KNS and the French Government to determine which solutions from the IGF can be implemented.