KNS, a significant player within New Caledonia’s economically vital but struggling nickel sector, had already halted its mining and processing activities in March. This followed Glencore’s decision to divest its stake in the company. In a temporary reprieve, Glencore had committed to covering worker salaries and maintaining furnace operations through the end of August. However, with no firm offer materialising, KNS proceeded to switch off its furnaces over the past weekend, effectively laying off approximately 1,200 employees, as confirmed by Alexandre Rousseau, Vice President and spokesperson for KNS.
“The furnaces were kept operational as long as possible, but without a concrete investment, we were compelled to shut down,” Rousseau told Reuters. He added that while three entities have expressed interest in acquiring Glencore’s stake, only two have progressed to detailed discussions. Both are expected to conduct site visits to KNS’s facilities in northern New Caledonia in the near future.
A spokesperson for Glencore confirmed that KNS has now entered a “care and maintenance” phase following the furnace shutdown, but declined to provide additional commentary on the ongoing sale process.
This cessation of operations marks a significant setback for New Caledonia’s nickel industry, which is grappling with a prolonged downturn exacerbated by recent political and social unrest in the French overseas territory. The unrest has had a debilitating impact on the sector, further evidenced by French mining giant Eramet’s local subsidiary, Société Le Nickel (SLN), which is currently operating at minimal capacity. Meanwhile, Prony Resources, the territory’s other major nickel processor, has suspended its activities altogether.
The future of KNS and its extensive workforce now hangs in the balance as potential buyers weigh the risks of investing in a region beset by economic uncertainty and political instability. The broader implications for the global nickel market remain to be seen, particularly as demand for the metal, a key component in electric vehicle batteries, continues to rise.
