The nickel sector in New Caledonia is facing challenges as factories and mining centers are operating at a reduced capacity or not at all due to the ongoing crisis in the region. This is having catastrophic consequences for an industry that was already struggling. While the security situation in the archipelago has improved with the deployment of approximately 3,500 soldiers, gendarmes, and police officers, the mining and metallurgical activities have come to a standstill since violent protests erupted on May 13 against electoral reform.
The pyrometallurgical plant of Société Le Nickel (SLN) in Nouméa was at the center of clashes between rioters and law enforcement, which were taking place just a few hundred meters away from the site. The five mining centers scattered across the archipelago are also shut down, and the ore reserves at the plant are decreasing, posing a risk to the industrial tool. Maintaining the high-temperature furnaces requires constant feeding, but the reserves are running low, raising concerns among unions who have called for the lifting of blockades at the mining sites.
SLN, a historic company in nickel mining in New Caledonia established in the late 19th century, has been targeted by several intrusions and destructions at its sites in Thio and Kouaoua on the east coast of Grande-Terre. In the southern region, Prony Resources, which is seeking a buyer, has relied on a €140 million state loan in March to ensure its survival until March 2025. However, the facility has been completely shut down since the start of the riots, as confirmed by the company. Koniambo Nickel (KNS) in the north of the island has been idle since February following Glencore’s decision to sell its 49% stake after incurring losses.
The state of the nickel sector in New Caledonia is worrisome as the industry was already facing challenges before the crisis. The current situation has further exacerbated the difficulties faced by mining and metallurgical companies, with operations grinding to a halt and reserves depleting rapidly. The closure of factories and mining centers not only impacts the companies themselves but also has wider economic repercussions for the region, including potential job losses and a decline in revenue.
The involvement of law enforcement in maintaining security in the archipelago has been crucial in addressing the violent protests, but it has not been enough to ensure the resumption of mining and metallurgical activities. The ongoing crisis has highlighted the vulnerability of the nickel sector in New Caledonia and the need for a sustainable solution to overcome the challenges faced by the industry. Finding a way to restart operations and stabilize production is essential to prevent further losses and safeguard the future of the nickel sector in the region.
As the government and stakeholders work towards resolving the crisis and restarting the nickel industry, it is important to address the underlying issues that have contributed to the current situation. This includes finding ways to ensure the security of mining sites, maintaining dialogue with all parties involved, and exploring potential solutions to support the industry. The future of the nickel sector in New Caledonia will depend on the ability of key players to come together and find sustainable solutions that benefit both the industry and the local communities.
