Key Factors
- Glencore, which introduced its intention to promote its stake within the loss-making KNS earlier within the yr, halted operations on the web site in March 2024.
- Excessive prices, unrest, and shutdowns hit New Caledonia’s nickel sector, disrupting operations and investor confidence.
- EV battery demand fuels curiosity, as Glencore explores strategic investments in vitality and rising markets.
Glencore Plc, led by South African govt Gary Nagle, has acquired two bids for its 49 p.c stake in Koniambo Nickel SAS (KNS), a struggling nickel producer in New Caledonia.
The presents, disclosed by KNS President Alexandre Rousseau, observe web site visits performed late final yr and are available amid important challenges for the area’s nickel business.
Stake sale amid sector challenges
Glencore, which introduced its intention to promote its stake within the loss-making KNS earlier within the yr, halted operations on the web site in March 2024. Regardless of a six-month window to safe a purchaser, no viable presents emerged, resulting in the shutdown of KNS’s furnaces in August.
Rousseau disclosed that two teams—each of which had proven prior curiosity—submitted formal presents after conducting web site visits between October and December. Whereas particular particulars in regards to the bids stay undisclosed, he confirmed that KNS’s shareholders, together with SMSP, which holds a majority 51 p.c stake, are at present reviewing the proposals.
Broader Nickel business struggles
KNS’s struggles mirror broader challenges confronted by New Caledonia’s nickel business. Excessive working prices and ongoing losses have weighed closely on producers. In Could 2024, riots erupted over electoral reforms, additional disrupting operations and damaging investor confidence.
Different gamers within the area are additionally grappling with instability. Prony Assets, which halted manufacturing for seven months following the unrest, resumed operations in December. The corporate is actively looking for new companions to interchange minority stakeholders, together with commodity dealer Trafigura.
In the meantime, Societe Le Nickel, managed by French mining group Eramet, continues to function at diminished capability as a result of partial blockage of its mines.
Glencore’s strategic focus
Beneath Nagle’s management, Glencore has continued to solidify its standing as a dominant pressure in world commodities, boasting a portfolio of over 60 commodities. With a workforce exceeding 150,000 workers and contractors, and operations spanning over 35 international locations, the corporate maintains a strong presence in each developed and rising markets.
Latest strikes embody exploring New Fortress Energy’s LNG assets in Jamaica and a $116 million investment in a 100-megawatt photo voltaic plant in South Africa, in partnership with Pele Inexperienced Vitality.
World Nickel demand and investor curiosity
Regardless of challenges in New Caledonia, nickel stays a important materials for electrical automobile (EV) batteries and renewable vitality applied sciences. South African metals producer Sibanye-Stillwater has expressed curiosity in sourcing battery-grade nickel however dominated out acquisitions.
Prony Assets just lately confirmed plans for a web site go to by a possible investor, signaling ongoing curiosity within the area’s strategic nickel belongings.
