Société Le Nickel’s extraction mining site of Thio (New Caledonia) Photo: SLN Eramet
French-owned historic nickel mining company Société Le Nickel (SLN) is putting its historic mining site in Thio (East Coast of the main island) into stand-by mode.
But it remains hopeful the mining sites can be reopened at a later stage.
The company, a subsidiary of French mining giant Eramet, said the extracting operations were no longer possible due to numerous, "massive", continuous blockades and attacks over the past six months, even before New Caledonia plunged into an insurrectional crisis on 13 May.
The announcement was made known to the employees through an internal note revealed by local media on Monday.
SLN said its three mining sites in Thio had suffered even more since violent riots broke out in May, with equipment and infrastructure - including its strategic ore conveying belt - being repeatedly targeted, staff being assaulted or threatened, and personnel and company property being stolen or destroyed by arson.
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SLN said over the past few months, a procedure had been initiated to allow employees to receive "partial unemployment" benefits.
The company has now taken steps to upscale the process to "full unemployment, "exactions-related" status for its some 230 staff directly impacted by the situation on the three Thio mining sites (Plateau, Camp des Sapins and Dothio).
Société Le Nickel Eramet operations map in New Caledonia Photo: SLN Eramet
Through this procedure, SLN expects its employees will be able to benefit from unemployment compensations for the next nine months.
Another 120 jobs from SLN subcontractors are also directly hit.
The current situation of "blockades, threats and repeated intrusions" had led to the "absolute and durable impossibility of gaining access to the sites and operate", the company informed its staff last week.
Impact on SLN's main smelter
This was also a significant blow to SLN's main smelter in Doniambo (near Nouméa) as the now-mothballed three Thio extracting sites were feeding about 20 percent of the metal being transformed there.
"SLN represents 140 years in Thio's life," Thio mayor Jean-Patrick Tura told public broadcaster Nouvelle-Calédonie la 1ère.
"This is very sad news as our whole economy, our shops, our businesses depend on the mining industry."
Two other companies also facing hardships
Apart from SLN's Doniambo smelter, two other nickel companies were until recently operating in New Caledonia.
But one of those three, Koniambo Nickel (KNS), the only smelter located in the north of the main island, was also mothballed and ceased operations in late August.
Some 1,200 KNS staff were made redundant, and another 600 employed by subcontractors are also out of a job.
KNS 'majority stakeholder, Swiss Glencore, is still trying to sell its 49 percent shares.
The other KNS partner is New Caledonia's Northern province (51 percent).
The third operator, Prony Resources (also in the South of Grande Terre), is attempting to restructure its stock.
South African group Sibanye-Stillwater is reported to be the frontrunner in acquiring shares in Prony Resources New Caledonia, which has also been struggling amid market shifts and local unrest.
The company is eyeing a 74 percent stake, including shares from Swiss trader Trafigura, in a bid to solidify its position in nickel production for electric vehicle batteries.
If successful, this acquisition would mark a significant step in Sibanye-Stillwater's strategy to control the entire nickel supply chain after its recent purchase of another nickel production unit in France.
The current nickel crisis in New Caledonia, which also causes major upsets in neighbouring countries such as Australia, is caused and compounded by a mix of factors.
These include excessive costs of production and the arrival of massive quantities of a cheaper nickel produced by new conglomerates in Indonesia, backed by Chinese investors, currently flooding the world market for the precious metal.