The Brazilian mining conglomerate Vale says a $US200 million loan from the French state has reduced the risk of it shutting its multi-billion dollar nickel plant in New Caledonia.
Photo: RNZ / Vale
The funding offer was announced by the French prime minister Manuel Valls at the beginning of last week to help shore up the territory's economy which is reliant on nickel production.
The head of Vale New Caledonia Darius Khoshnevis said the loan has reduced the risk of the plant's closure but not eliminated it.
The plant in Goro in the territory's very south, which employs about 1,400 people, has been running at a loss which this year is expected to amount to $US150 million.
Mr Khoshnevis said the production cost of a tonne of nickel has been lowered from $US21,000 to $12,500 this year while the global market price is at $10,400.
The Vale plant has been dogged by technical issues and acid spills.
New Caledonia's two other nickel plants, SLN in Noumea and Koniambo in the north, are also struggling as a result of the drop in the price of nickel.