Glencore revealed plans on Monday to divest its interest in Koniambo Nickel SAS (KNS) in New Caledonia, alongside a decision to suspend operations at KNS’s processing plant for six months as it seeks a new investor for the operation currently incurring losses. Amid efforts to rejuvenate New Caledonia’s faltering nickel industry, France has proposed state support estimated at 200 million euros for KNS, a gesture that, according to Glencore, falls short of making the operation profitable due to high operational costs and the current downturn in nickel market conditions.
Glencore, holding a 49% stake in KNS, had previously declared it would only back the venture until the end of February, after investing billions over the last decade. The company will now embark on a quest to find a suitable industrial partner to take over its stake in KNS.
The decision comes amidst France’s ongoing negotiations to safeguard the nickel sector in New Caledonia. However, the French finance ministry has not yet responded to these developments.
During the six-month hiatus, Glencore commits to financing KNS as the plant transitions into a “care and maintenance” phase, ensuring the furnaces remain operational to preserve the site’s integrity. Moreover, Glencore assures that all local employees of KNS will retain their jobs during this period.