Koniambo Nickel SAS (KNS) Vavouto, a major mining site near Koné, New Caledonia, announced the suspension of its operations on February 28, 2024. The company, which has been instrumental in the development of the northern part of the archipelago, is facing significant challenges as it has failed to find a new owner and will be forced to close its doors. This decision has led to the dismissal of 1,200 employees, adding to the already existing 600 contractors who are currently unemployed. This event comes at a time when New Caledonia is experiencing an unprecedented crisis fueled by ongoing violence and economic challenges.
The difficulties faced by KNS, also known as the Northern plant, are not new. The company, which has never been profitable, has accumulated a substantial debt of 13.5 billion euros. Glencore, its main shareholder, decided to withdraw its support in February, leading to the current situation. The company’s financial woes have been shouldered entirely by Glencore, which held a 49% stake in KNS. This decision has significant implications not only for the company but also for the province North, where the plant is located, as it was initially conceived as a development project to push economic growth in a region that had been left behind.
The inception of KNS dates back to 1966 when General de Gaulle envisioned the project as a means to revitalize the economy of the province North by tapping into valuable nickel reserves in the region. The construction of the plant began in 2010 and has since been a driving force behind economic growth in the area. The Voh-Koné-Pouembout area, where the plant is situated, has seen a significant increase in the number of businesses, with economic benefits totaling 5 billion euros since 2005. The population of the area has also grown substantially, highlighting the success of the project in terms of regional development.
The closure of KNS represents a significant blow to the economy of New Caledonia, especially in the midst of a crisis that has already resulted in the destruction of over 700 businesses and left a quarter of the workforce unemployed or on reduced hours. The closure of the plant is expected to have a ripple effect on the local economy, potentially halting the development and growth that the region has experienced in recent years. The loss of KNS as an economic engine threatens to reverse the progress made in the province North and could have far-reaching consequences for the entire territory.
Without a new owner to take over KNS, the future of the plant and its employees remains uncertain. The closure of the plant will not only impact the workers directly employed by KNS but also the subcontractors who rely on the plant for their livelihood. The repercussions of this decision are likely to be felt across New Caledonia, with concerns about the broader economic implications and the potential for a wider downturn in the region. The fate of KNS serves as a stark reminder of the challenges faced by the region and the need for sustainable economic development to ensure long-term stability and growth.
