A South African company is reported to be the most probable bidder for shares in New Caledonia’s Prony Resources.

As part of an already advanced takeover of the ailing southern plant of Prony Resources, the most probable bidder is reported to be South African group Sibaneye-Stillwater, local new media report.

Just like the other two major mining plants and smelters in New Caledonia, Prony Resources is facing acute hardships due to the emergence of Indonesia as a major player on the world market, compounded with New Caledonia’s violent unrest that broke out in May.

• READ MORE: Other Kanaky New Caledonia mining reports

Prony Resources has been trying to find a possible company to take over the shares held by Swiss trader Trafigura (19 percent).

The process was recently described as very favourable to a “seriously interested” buyer.

Citing reliable sources, daily newspaper Les Nouvelles Calédoniennes yesterday named South Africa’s Sibanye-Stillwater.

The Johannesburg-based entity is a significant player on the minerals world market (including nickel, platinum and palladium) and owns, amongst other assets, a hydro-metallurgic processing plant in Sandouville (near Le Havre, western France) with a production capacity of 12,000 tonnes per year of high-grade nickel which it bought in February 2022 from French mining giant Eramet for 85 million euros (NZ$153 million).

The ultimate goal would be, for the South African player, to become a leader on the production market for innovative electric vehicles batteries, especially on the European market.

Southern Province President Sonia Backès had already hinted last week that one buyer had now been found and that one bidder had successfully reached advanced stages in the due diligence process.

If the deal eventuated, the new entity would take over the shares held by Swiss trader Trafigura (19 percent) and another block of shares held by the Southern Province to reach a total of 74 percent participation in Prony Resources stock, as part of a major restructuration of the company’s capital.

Prony Resources, in full operation mode, employs about 1300 staff.

Another 1700 are employed indirectly through sub-contractors.

It has paused its production to retain only up to 300 staff, in safety and maintenance mode, partly due to New Caledonia’s current unrest.

New Caledonian consortium’s surprise bid for mothballed Northern plant
Meanwhile, a local consortium of New Caledonian investors is reported to have made an 11-hour offer to take over and restart activity for the now mothballed Koniambo (KNS) nickel plant.

The plant’s furnaces were placed in “cold care and maintenance” mode at the end of August, six months after major shareholder Anglo-Swiss Glencore announced it wanted to withdraw and sell the 49 percent shares it has in the project.

This caused close to 1200 job losses and further 600 among sub-contractors.

Other bidders still interested
KNS claimed at least three foreign investors were still interested at this stage, but none of these have so far materialised.

Talks were however reported to continue behind the scenes, with interested parties even ready to travel and visit on-site, KNS Vice-President and spokesman Alexandre Rousseau told Reuters news agency earlier this month.

‘Okelani Group One’
But a so-called “Okelani Group One” (OGO), made up of three local partners, said their offer could revive the project with a different business model.

They say they have made an offer to KNS’s majority shareholder SMSP (Société Minière du Sud Pacifique, New Caledonia’s Northern province financial arm).

OGO president Florent Tavernier told public broadcaster NC la 1ère much depended on what Glencore intended to do with the staggering debt of some US$13.7 billion which KNS had accumulated over the past 10 years.

Another OGO partner, Gilles Hernandez, explained: “We would be targeting a niche market of very high quality nickel used in aeronautics and edge-cutting technologies, especially in Europe, where nickel is now classified as ‘strategic metal’.”

Although KNS was designed to produce 60,000 tonnes of nickel a year, that target was never reached.

OGO said it would only aim for 15,000 tonnes per year and would only re-employ 400 of the 1200 laid-off staff.

New Caledonia’s third nickel plant, owned by historic Société Le Nickel (SLN, a subsidiary of French mining giant Eramet), which is also facing major hardships for the same reasons, is said to currently operate at minimal capacity.

This article is republished under a community partnership agreement with RNZ.

The French-proposed “pact” to salvage New Caledonia’s beleaguered nickel industry is still in limbo as the local Congress has decided to refer the whole document to a “special committee” for re-examination.

The committee was set up on Thursday during a Congress special sitting.

The pact has been proposed to rescue New Caledonia’s nickel industry, which faces grave difficulties.

• READ MORE: Other New Caledonia nickel industry reports

One of its three processing plants and smelters, Koniambo (KNS) located in the Northern province, has already been mothballed due to the decision from major financier Glencore to pull out and sell its 49 percent shares within the next six months.

This has already affected more than 1000 jobs.

This comes as a result of significant changes in the world nickel industry production market, which is now dominated by Indonesia, with the ability to produce nickel in large quantities and at a much lower price.

The other two processing plants, Prony Resources and historical player Société le Nickel (SLN, a subsidiary of French mining giant Eramet), also face a critical situation and the risk of closing down within the next few months.

Prony’s Swiss stakeholder Trafigura is also on the way out and Eramet has clearly indicated it no longer intends to further finance SLN.

Emergency assistance
The “pact” is an attempt by French Finance minister Bruno Le Maire (who visited New Caledonia on a fact-finding mission in November 2023) to provide some €200 million (NZ$365 million) in emergency assistance, provided New Caledonia’s nickel industry commits to major reforms in order to reduce its production costs and finds new market outlets, possibly in Europe.

Le Maire initially scheduled the signing of this pact for the end of January 2024.

But since, the document has still not been signed.

Even though France and most pro-France parties in New Caledonia have since urged local authorities to urgently sign the document, it now faces more opposition from the pro-independence parties there, as well as one of the pro-French parties (Calédonie Ensemble).

They argue that the pact, in its present form, is not asking enough commitment from the nickel industry companies and that it also required New Caledonia to dig into its coffers and find over 65 million US dollars to finance a cost-cutting electricity exercise, which would require raison new taxes and therefore adding to the burden of the local population.

SLN’s extraction sites blockaded
For more than a week also, SLN is facing more hardships as it is barred from extracting nickel for its Nouméa smelter in the Northern province.

This comes after a decision from Northern province President Paul Néaoutyine, who has invoked several late payments of an administrative provision designed to guarantee possible environmental damage.

Eramet has since held several emergency meetings in Paris and released sufficient funds for a short-term payment.

But Néaoutyine has since demanded that those payments cover a longer period.

Meanwhile, SLN’s extraction activities on Northern sites have ground to a halt.

Only maintenance and security work is remaining.

This places SLN’s Nouméa smelter in a reduced activity mode with a real danger of slow suffocation if normal levels of nickel supply don’t resume soon enough.

Over the past week, tension has significantly escalated on SLN’s extraction sites, where blockades have sometimes prevented SLN employees to access Northern extraction sites.

Some of the SLN staff have also been verbally “insulted” and assaulted” by local villagers in the rural mining towns of Canala, La Foa and Kouaoua, SLN said earlier this week in a release.

Nickel turns political again
New Caledonia’s Congress (with a pro-independence majority of members) on Thursday resolved to initiate a process of “formulating complementary” and “alternative” propositions to the French nickel pact.

During sometimes heated debates, pro-pact parties Les Loyalistes and Rassemblement have expressed strong reservations about the new process, saying the signature was urgent and that thousands of jobs were at stake.

Last week, New Caledonia’s government President Louis Mapou, even though a member of the pro-independence side, urged the Congress pro-independence majority members to vote for the signing of the pact.

He accused them of ignoring economic reality and of wanting to turn the whole issue into a political one.

The nickel pact issue has since become a major bone of contention in the more general political confrontation between pro-independence and pro-France parties, including over a French-proposed change in voters eligibility for local elections.

Talks between all local parties in order to address New Caledonia’s long-term political future have been stalled.

On April 13, those issues were at the centre of two simultaneous demonstrations when the marches, one organised by pro-independence movements and the other by pro-France parties, brought at least 40,000 people to the streets of Nouméa.

The Congress’s new Special Committee is scheduled to hold its first meeting on Monday, 22 April 2024.

No date has been announced that would indicate a specific duration for its debates.

This article is republished under a community partnership agreement with RNZ.