New Caledonia’s nickel processing industry, a cornerstone of the French territory’s economy, has been brought to a screeching halt by recent unrest. The riots, sparked by controversial electoral reforms, have laid bare deep cracks in the industry, which was already struggling financially. Now, all three of New Caledonia’s main nickel producers – KNS, Prony Resources, and Eramet-owned SLN – face the very real possibility of collapse.
SLN Scrambles to Keep Furnaces Alive
SLN, the territory’s largest nickel producer, is fighting to keep its Doniambo smelter operational. With mining operations at a standstill due to the unrest, the company is resorting to creative measures. They’re transporting stockpiled nickel ore by ship from their mines to feed the hungry furnaces at Doniambo. However, an Eramet spokesperson painted a grim picture, saying “the situation remains critical.” This urgency highlights the need to resume regular ore supplies as soon as possible to prevent the furnaces from shutting down completely.
Citing security concerns in the wake of the riots, Prony Resources has made the drastic decision to halt operations entirely. This complete shutdown of both their processing plant and nearby mine significantly limits New Caledonia’s nickel production capacity. The lost output from Prony Resources adds to the growing pile of challenges facing the already troubled industry.
The recent unrest is merely the latest blow to New Caledonia’s nickel industry. Even before the riots began, the sector was grappling with serious financial difficulties. KNS, another major producer co-owned by Glencore, had already idled its mine and plant operations back in March of this year. Glencore’s decision to seek a buyer for its stake in KNS foreshadowed the current crisis.
French Government Scrambles for a Lifeline
The French government, which controls New Caledonia, has been attempting to negotiate a rescue package for the ailing nickel sector for months. These efforts, however, have been thrown into disarray by the recent unrest. The immediate priority has shifted to restoring order and calming tensions in the territory. Additionally, France’s upcoming snap parliamentary election has further complicated the situation, pushing any potential rescue plan down the political agenda.
While the violence has subsided somewhat due to increased police presence, a nighttime curfew remains in place, a constant reminder of the fragile peace. The long-term impact of the unrest on the nickel industry remains to be seen. The French government’s ability to formulate and implement an effective rescue plan, coupled with the industry’s capacity to recover from this setback, will determine the future of New Caledonia’s nickel production. The ripples of this crisis could be felt throughout the territory’s economy, as nickel remains a vital sector for employment and exports.
Amidst the uncertainty, calls for dialogue between the Kanak people, the indigenous population of New Caledonia, and the French government are growing louder. Many believe that a lasting solution to the unrest and the future of the nickel industry can only be achieved through open and honest communication that addresses the underlying grievances of the Kanak population.
Source: Mining.com
