France extends New Caledonia nickel rescue talks
05/02/2024 17:14
PARIS, Feb 5 (Reuters) - France will continue talks
until the end of February to save New Caledonia's nickel
industry, the finance ministry said on Monday, after failing to
reach a deal last month to fill a massive funding shortfall for
the territory's nickel processors.
New Caledonia has some of the world's largest nickel
reserves but high costs and political tensions in the
French-controlled Pacific territory have left its three
processing plants on the verge of collapse.
The French government has held talks on nickel in parallel
to wider political negotiations with pro-independence and
loyalist political parties. Finance Minister Bruno Le Maire said
in late November he wanted a nickel deal by the end of January.
"The talks will continue until the end of this month," a
finance ministry spokesperson said, adding: "Later than that is
not possible because the financing needs are immediate."
Le Maire has estimated at 1.5 billion euros ($1.61 billion)
the short-term financing needs of New Caledonia's three nickel
processing groups - SLN, KNS and Prony Resources.
Commodities group Glencore GLEN.L , which co-owns KNS, has
said it will only provide funding for the firm until the end of
February, while French miner Eramet ERMT.PA has repeatedly
said it will not provide more funding for SLN, in which it holds
a majority stake.
A working group of political and industry representatives
that has led the negotiations said in a progress report last
month that falling nickel prices CMNI3 meant measures proposed
so far still left a significant funding gap for 2024.
It called on current shareholders to consider extra
financing.
Prony Resources, meanwhile, said in a statement last month
it was seeking "a core shareholder" to boost its financing.
Prony has a number of minority shareholders including
commodity merchant Trafigura with a 19% stake.
Glencore, Eramet and Trafigura each declined to comment on
the talks.
Discussions have sought to address the unprofitability of
nickel processing in New Caledonia through plans to improve
mining productivity and subsidise energy costs.
The French government's representative in New Caledonia last
week said an emergency loan for the processing firms was also
under discussion.
($1 = 0.9314 euros)
(Reporting by Gus Trompiz, Clara Denina and Melanie Burton;
Editing by David Gregorio)
((gus.trompiz@thomsonreuters.com; +33 1 49 49 52 18; Reuters
Messaging: gus.trompiz.thomsonreuters.com@reuters.net))