The SLN nickel company in New Caledonia has decided to close indefinitely its mining site at Kouaoua, saying security can no longer be assured for its staff and its installations.
The decision comes as access to the site has been blocked by about 50 mainly young people for more than a week and after a weekend fire which further damaged the conveyor belt system feeding ore to the coast.
The protest was reportedly triggered by SLN felling trees and expanding its mining activities, which had been approved by the authorities.
According to reports, the protesters brought all operations to a halt and threatened to set fire to the installations.
SLN said the closure affected its employees who it said it would try to redeploy at its other sites, with the remainder to be laid off.
The company also said since the start of the blockade last week, it has invoked force majeure and thereby suspended all contracts, which concerns a total of 400 employees and contractors.
The weekend fire targeting the belt system was the tenth in two years, causing each time substantial material damage.
Les Nouvelles Caledoniennes reported that police trying to intervene were attacked.
Discussions planned for Sunday involving the protesters and local leaders were called off.
SLN said it was prepared to engage in talks to re-open Kouaoua but this can only happen if the safety of its employees and sub-contractors can be assured.
It also said the disruption to the ore supply has been very damaging to the operations of the smelter in Noumea as SLN continues to run at a loss.