French government flags fresh funds for nickel rescue

Elysee Palace. Stock image.

The French government plans to offer fresh subsidies and loans for a New Caledonia nickel plant co-owned by commodities group Glencore but won’t go any further than that, Finance Minister Bruno Le Maire said on Tuesday.

The French-controlled Pacific territory has some of the world’s largest nickel reserves, but high costs have left its three processing plants on the verge of collapse.

Le Maire has previously estimated the short-term financing needs of the three nickel processing groups – SLN, KNS and Prony Resources – at 1.5 billion euros ($1.61 billion).

Commodities group Glencore, which co-owns KNS, has said it will provide funding only until the end of February. French miner Eramet has repeatedly said it will not provide more funding for SLN, in which it holds a majority stake.

Le Maire on Tuesday said that the government would provide 60 million euros ($64 million) through subsidised energy prices, 45 million euros in additional resources and a 100 million euro loan.

“Now it’s up to the shareholders to take their responsibilities. We will not go any further and we will not subsidise losses,” Le Maire told lawmakers in the lower house of parliament.

The French state, which has complicated relations with New Caledonia authorities over some parties’ pro-independence stance, also wants the territory’s northern province to participate in the rescue, Le Maire said.

His ministry on Monday said that the France would continue talks until the end of February to save New Caledonia’s nickel industry after last month’s failure reach a deal to meet its funding shortfall.

($1 = 0.9309 euros)

(By Leigh Thomas; Editing by GV De Clercq and David Goodman)


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