Glencore and Société Minière du Sud Pacifique SA (SMSP) will transition the Koniambo Nickel SAS (KNS) into care and maintenance.
KNS is a joint venture where SMSP owns 51 per cent of the project’s capital and the remaining 49 per cent is owned by Glencore. It is located in the northern province between Voh and Koné in New Caledonia.
Glencore has confirmed that the KNS’ furnaces will continue operating for six months and will retain all local KNS employees for a six-month period to aid in the operation’s transition.
“This decision follows several months of extensive discussions and negotiations with relevant government and other key stakeholders,” Glencore said.
“Even with the French government’s proposed assistance, high operating costs and current very weak nickel market conditions means KNS remains an unprofitable operation.
“Glencore is appreciative of the French Government’s efforts to revitalise and rescue the nickel industry in New Caledonia, however, even with the proposed assistance, KNS remains an unsustainable operation and Glencore cannot justify continuing to fund losses to the detriment of its shareholders.”
Glencore first acquired its stake in KNS in 2013 as part of the Xstrata transaction. Since the project’s inception, the major miner has invested $US9 billion, with $US4 billion being invested since 2013.
Despite being KNS’ primary funder, Glencore said it hasn’t ever realised a profit.
The revelation follows Glencore announcing in October 2023 that it would only provide funding for KNS until February 29. The company cited “financial challenges” as the reason for the decision.
KNS is just the latest nickel mine to transition into care and maintenance.
It was announced last week that the Avebury nickel mine in Tasmania will transition back into care and maintenance, less than two years after recommencing operations. The Tasmanian Government has since made funding available to the workers impacted by the mine’s closure.