New Caledonia’s mothballed northern nickel plant, Koniambo Nickel (KNS), has appointed a new chairman to steer a shareholding transfer amid the territory’s industry troubles.

He is Alexandre Rousseau, who was until now the company’s vice-president.

The company said in a release it had this month replaced Neil Meadows, who has held the position for the past three years.

• READ MORE: Other New Caledonia nickel reports

Rousseau has been with the company for the past 15 years.

Like his predecessor, his main task will be to supervise the company’s main shareholder Anglo-Swiss Glencore’s transfer of shares to a yet-to-be-identified buyer.

The nickel plant, located in the north of New Caledonia’s main island, was mothballed in late August 2024, leaving about 1200 employees unemployed.

Glencore announced early last year its decision to withdraw from the venture, which had accumulated a staggering loss of 13.7 billion euros (NZ$25 billion) in 10 years of operation.

Seeking potential buyers
KNS has since been searching for potential buyers for Glencore’s 49 percent shares.

The majority shareholder (51 percent) remains Société Minière du Sud Pacifique (SMSP), which is the financial arm of New Caledonia’s Northern Province.

KNS said talks were ongoing with at least two interested international companies, which had sent inspection delegations on site during the last quarter of 2024.

Another nickel mining plant, Prony Resource, in the south of New Caledonia’s main island, is also seeking potential buyers for parts of its stock.

The most advanced talks are with South Africa’s precious metals producer Sibanye-Stillwater, which said it was considering Prony as a possible source for battery-grade nickel.

While Prony had to cease production for several months due to New Caledonia’s insurrection last year, it managed to gradually resume operations last month.

This is in view of a planned inspection visit from a Sibanye-Stillwater delegation, who want to see a functioning factory.

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

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.

New Caledonia’s mothballed nickel plant in Koniambo (north of the main island of Grande Terre) has announced it has started mass sackings of some 1200 staff, despite efforts to identify a potential buyer.

Koniambo (KNS-Koniambo Nickel SAS) operations had already been mothballed after the announcement, in February, from its major financier, Anglo-Swiss giant Glencore, that it wanted out.

KNS is jointly owned by Glencore (49 percent) and New Caledonia’s Northern province (51 percent).

• READ MORE: Other nickel mine industry reports

While making the announcement, Glencore signalled a 6-month delay in the implementation of its decision, including payment of salaries.

The same timeframe was also supposed to be used to find potential buyers for the shares owned by Glencore.

Glencore said in February that keeping its stake in KNS was no longer sustainable.

It also recalled that the plant, in more than 10 years of existence and operation, had never made a profit.

Staggering debt
Over the past decade, KNS had accumulated a staggering 13.5 billion euros (NZ$25 billion) in debt.

As the August 31 deadline looms at the end of the six-month respite, what had been the symbol of New Caledonia’s Northern province empowerment and wealth “re-balancing” of the French Pacific archipelago’s provinces is now faced with a bleak reality.

Koniambo’s wealth relies on the Tiébaghi nickel massif, believed to hold about one quarter of New Caledonia’s nickel reserves.

Koniambo: a highly political symbol
KNS was born from a political and financial deal, including France — the “Bercy Accord” signed in December 1997, just months before the political Nouméa autonomy Accord was signed in 1998.

The deal was de facto enacting the transfer of the Tiébaghi massif to New Caledonia’s Northern province and its financial arm, the Société Minière du Sud Pacifique (SMSP).

It was the financial translation of the will to restore some balance between the affluent Southern Province and the less favoured Northern Province of New Caledonia, mostly populated by the indigenous Kanak community.

Since the Koniambo project and its construction started, the new activity has had a stimulating effect on the whole region, especially in the small towns of Voh, Koné and Pouembout.

The number of local companies increased, as well as the population.

In announcing the official lay-offs on Friday, KNS still wanted to appear optimistic: “Even though we are pursuing the search process for a potential buyer, and that three groups continue to display an interest for our company, we do not have at this stage a finalised offer”, the company admitted.

“We are therefore compelled to go ahead with the collective lay-off process on economic grounds”.

‘Cold’ sleep process
Beyond August 31, only a group of about 50 workers will remain employed in maintenance work on what will then be described as “cold” sleep process.

“But the fact that three world-class groups are still in discussions show that Koniambo Nickel still represents a strong interest for potential takeovers”, an optimistic KNS vice-president Alexandre Rousseau, told public broadcaster NC la 1ère on Saturday.

On top of the wave of sackings announced by KNS, some 600 contractors relying on the plant’s activities have also lost their jobs since February.

Local unrest – world nickel crisis
The announcement comes as New Caledonia’s economy is in a critical situation.

It has suffered a major blow, on top of an already grave financial situation.

Since May 13, violent unrest has been ongoing in New Caledonia, with a backdrop of protests against French-proposed modifications of voters’ eligibility for provincial elections, regarded by pro-independence movements as a bid to reduce the political voice of the indigenous Kanak community.

Since the riots, destruction, looting and arson began, more than 700 businesses have been destroyed, 10 people killed (eight civilians and two French gendarmes), and the overall cost of the unrest has topped 2.2 billion euros (NZ$4 billion).

During the riots and unrest, nickel mining sites have been specifically targeted several times.

Entire nickel sector in crisis
New Caledonia’s nickel industry has also been in profound turmoil over past years.

Its other two plants — in the Southern province (Prony Resources) and historic operator Société le Nickel (SLN) in Doniambo near Nouméa — owned by French mining giant Eramet — are also on the verge of collapse.

The situation comes from a world nickel market now dominated by Indonesian units, which have started to produce nickel in mass quantities and at a much lower price.

The result was a collapse of the world nickel price — it slumped by 48 per cent in 2023.

New Caledonia’s production, in this context, was also regarded as too expensive, prompting efforts for a deep reform, especially on the cost structure such as electricity.

A French assistance plan proposed in 2023 by French Finance Minister Bruno Le Maire, including a 200 million euro (NZ$367 million) package, was declined by local authorities, who said too much was being asked by France in terms of strings attached to the massive funding loan.

The French-proposed reform also intended to diversify New Caledonia’s nickel buyers from an almost-entire reliance on Asian clients and instead turn to more European buyers, mostly car manufacturers for the purposes of production of batteries for electric cars.

Other plants on the verge of collapse
As a result of the combined effects of the current situation (the ongoing riots and the pre-existing nickel crisis), Prony Resources’ operations are at a standstill.

Eramet, which in recent months had made no secret of its desire to disengage from SLN, earlier reported a net loss of some 72 million euros (NZ$133 million) for the first half of the financial year.

New Caledonia’s nickel industry is believed to employ about 25 percent of the French Pacific archipelago’s workforce.

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.