11 Sep 2017

New Caledonia's struggling SLN looks to lower production costs

4:15 am on 11 September 2017
The SLN plant in Noumea.

The SLN plant in Noumea. Photo: RNZ / Johnny Blades

New Caledonia's SLN nickel company says it wants to lower production costs by a third within three years to ensure the business survives.

The commodity slump of late has incurred SLN onging losses of almost one million US dollars a day, prompting a restructure which calls for a longer working week and job cuts.

SLN says its target is to reduce the cost of producing one pound of nickel from $US6 in 2015 to $US4 in 2020.

To achieve this, the workforce is to be cut from 2,000 to 1,700 within three years while changing work practices.

This would entail changes to management and reducing the teams from five to four, who would then be made to increase their hours to 42 a week.

SLN has survived the downturn courtesy of a $US390 million advance from its parent company Eramet and a loan of $US240 million from the French state.

SLN's restructure comes amid a review by Vale of Brazil, which is reviewing the viability of its nickel plant in the south of New Caledonia.

The two plants are the territory's dominant private sector employers.