The KNS nickel plant – one of three in the French overseas territory of New Caledonia – has announced it will make its 1,200 employees redundant by the end of August in the absence of a "finalised offer" from a buyer.
Koniambo Nickel SAS, which is in serious financial difficulty with a colossal debt of over €13 billion, had been looking for a buyer since the departure last February of the Anglo-Swiss group Glencore – its main shareholder.
KNS said in a press release on Friday: "While the search for a buyer is continuing actively and three groups continue to show an interest in our company ... we have neither a finalised offer nor visibility on the financing of the operations”.
"As a result, we are obliged to continue the process of collective redundancies for economic reasons," KNS added.
According to management, the 1,200 employees will be made redundant on 31 August.
Around 50 of them will stay on after that date, "to ensure that the site remains on cold standby".
Debt management
The KNS site – one of the main employers in New Caledonia – has also relied on subcontractors employing some 500 people.
Glencore had agreed to fund salaries until the end of August to allow operations to be put on a so-called "hot standby", enabling a rapid resumption of activities in the event of a takeover.
The company said Friday that the decision to lay off almost all the staff "does not call into question the process of finding a new economic partner".
Until now, the company's debt had been entirely assumed by Glencore, under the terms of a shareholders' agreement linking the group to Société minière du Pacifique Sud (SMSP), which is owned by public interests representing the archipelago's pro-independence North Province.
Market collapse
New Caledonia is bearing the full brunt of the global nickel crisis, and the territory's two other plants are also threatened with closure.
Prony Resources in the south of the archipelago has come to a complete standstill, while SLN in the capital Nouméa posted a net loss of €72 million in the first half of the year, according to figures presented on Thursday by its main shareholder, the French group Eramet.
The difficulties have been exacerbated by the insecurity and civil unrest that has reigned in New Caledonia since mid-May, disrupting ore supplies and employee access to many sites.
Recent riots, sparked by a vote on a proposed reform of the territory's electoral body – which the pro-independence faction opposes – have resulted in the deaths of at least 10 people, including two policemen, and considerable material damage to the archipelago's infrastructure, estimated at over €2 billion.
(with newswires)
