KEY POINTS
- Two bidders have submitted offers for Glencore’s stake in KNS.
- High operating costs and unrest have hindered New Caledonia’s nickel sector.
- KNS shareholders are reviewing the proposals to chart the company’s future.
Two potential buyers have submitted offers for Glencore’s stake in Koniambo Nickel SAS (KNS), a troubled nickel producer in New Caledonia.
The bids come after site visits conducted between October and December, according to Alexandre Rousseau, president of KNS.
The company’s operations have been shuttered since March 2024 following prolonged losses and a decision by Glencore to exit its 49 percent interest.
KNS, which operates within New Caledonia’s high-cost nickel industry, faces significant challenges, including economic instability and riots triggered by electoral reforms.
According to Reuters, Rousseau confirmed that shareholder discussions are ongoing but provided no additional details about the bidders or the offers.
Bidders show renewed interest after shutdown
Two groups have expressed interest in acquiring Glencore’s 49 Percent stake. After conducting site visits late last year, they submitted their proposals, which are currently under review by KNS shareholders.
Glencore has declined to comment, while the majority shareholder, SMSP, which holds a 51 percent stake, has not responded to inquiries. SMSP is the mining investment arm of New Caledonia’s northern province.
High costs and unrest cripple the nickel industry
The New Caledonian nickel sector has faced years of financial strain due to elevated operating costs and market volatility.
Worse was electoral reforms riots in may 2024 that saw disruptions of production of its products and greatly affecting operations of organizations like KNS and Prony Resources.
Despite the struggles, Prony Resources resumed operations in December after a seven-month halt and is now seeking a new partner to replace its minority stakeholders.
South African metals producer Sibanye-Stillwater has shown interest in sourcing battery-grade nickel from Prony but ruled out acquisitions.
Thus, as KNS is looking at its future development plans the rest of the nickel sector in New Caledonia will have a rather more challenging time.
Societe Le Nickel, controlled by France’s Eramet, continues to operate at low capacity due to blocked mines.
New Caledonia could experience the change in its mining industry which is of considerable importance to the global nickel market as a result of the sale of KNS
