25 Jan 2019

Strike hurts New Caledonia nickel business

9:18 am on 25 January 2019

New Caledonia's SLN nickel company says this month's strike has created a serious situation for the already troubled business.

SLN smelter in Noumea New Caledonia

SLN smelter in Noumea New Caledonia Photo: RNZ Walter Zweifel

Ore stocks at the smelter in Noumea have shrunk to a third of its usual supply which has forced the plant to cut nickel production.

This comes as three of SLN's four mines have been affected by strikes launched at the beginning of the year over changes to the work schedules.

There are differences among the different unions, with some refusing to work longer days while others fear the company's competitiveness and survival are at stake.

SLN's production costs are higher than those of rival producers in China, Indonesia and the Philippines, but the company management thinks its planned restructure will help.

With its 2,000 staff SLN is New Caledonia's biggest private sector employer, but in the past six years it has run up losses of $US1 billion.

Close to bankruptcy in 2016, the French state and SLN's parent company Eramet advanced almost $US600 million to keep SLN going.

At the current rate of incurring losses, the loans are expected to be depleted by the end of this year.

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