Glencore Plans Closure or Sale of Unprofitable Nickel Mines in New Caledoni
Glencore’s joint venture, Koniambo Nickel SAS (KNS), in New Caledonia, is set to transition into care and maintenance due to high operating costs and weak nickel market conditions, the company announced on Monday.
Acquired as part of Glencore’s 2013 Xstrata transaction, KNS has struggled with profitability despite efforts by the French government to support the nickel industry in New Caledonia.
Glencore expressed gratitude for the government’s initiatives but stated that KNS remained unsustainable, and funding further losses was not justifiable for its shareholders.
The company plans to seek a new industrial partner for KNS and will continue funding the operation during the transition to care and maintenance as per an agreed budget.
During this period, KNS’s furnaces will remain operational for six months, and the team will focus on maintaining the asset’s integrity and site security.
All local employees will be retained for six months to facilitate the transition process.
The decision reflects the broader challenges faced by nickel miners globally, with low prices prompting companies to scale back operations to reduce costs and protect margins amidst oversupply from Indonesia.
