Indonesia’s Jan-Oct nickel ore imports surge by 50 times from year ago
The world's biggest nickel producer has bought record volumes of the ore from the Philippines since April.
France has agreed to provide a 140 million euro ($150 million) loan to Prony Resources to avert the collapse of the New Caledonian nickel producer as Paris pursues negotiations to salvage the Pacific territory’s loss-making nickel industry.
Prony Resources is one of three nickel processors in the French territory of New Caledonia that face insolvency as high costs and political tensions have hit profitability while rising Indonesian supply has dented international prices.
The French government has approved the loan in addition to 40 million euros in annual energy subsidies for Prony proposed in a wider package for the industry that Paris aims to sign off this month, Sonia Backes, president of New Caledonia’s southern province, said on Thursday.
“This loan will give us time to find a buyer,” Backes told local broadcaster La 1ere Nouvelle Caledonie, adding the funds should allow Prony Resources to continue operating until 2026.
Prony Resources spokesperson Adelie Garaud Ballande said negotations were still underway on the terms and conditions of the loan.
“At this stage, nothing has been signed and sealed,” she said via email. “The amount of the emergency loan to be granted by the State will give us time to make every effort to attract an investor.”
France’s finance ministry said the proposed loan was subject to an overall agreement being reached on the New Caledonian industry.
The southern province where Prony’s operations are based is one of several shareholders in the company. Commodity merchant Trafigura also has a 19% stake.
Rothschild & Co has been mandated to find a new investor for Prony, Backes said. A spokesperson for Rothschild did not immediately respond to a request for comment.
Paris had offered similar aid to Koniambo Nickel SAS (KNS) but its co-owner Glencore said the support was insufficient, announcing this week it was halting output at KNS’ processing plant for six months while it sought a buyer for its stake.
New Caledonia’s third nickel processor is SLN, in which French miner Eramet has a majority stake. Eramet has said it will not provide further funding to cover losses at the business.
($1 = 0.9276 euros)
(By Gus Trompiz and Mathieu Rosemain; Editing by Jane Merriman and Edwina Gibbs)
Comments
Michael James Bue
Propping-up loss-making Phony will not solve the over supply issue that is behind the low nickel price. lt should be placed on standby and potential cost reductions reviwed.