9 Jun 2020

Losses mount for New Caledonia's SLN

12:10 pm on 9 June 2020

New Caledonia's loss-making SLN nickel company says $US75 million is left of the loan it had taken out after another year of losses.

SLN smelter in Noumea New Caledonia

SLN smelter in Noumea New Caledonia Photo: RNZ Walter Zweifel

Shareholders were told that last year losses amounted to just over $US90 million, with production falling below 50,000 tons for the first time in 34 years.

The nickel producer was hit by protracted industrial action and sabotage at its mining sites.

SLN, which is New Caledonia's largest private sector employer, was thrown a lifeline in 2016 when the French state and the SLN parent company Eramet saved it from collapse by giving it a loan worth almost $US600 million.

At the time, the plummeting nickel price caused daily losses of half a million.

Despite this year's rise in the nickel price, SLN said it needed to get the local government's approval to sell nickel ore to mainly China in order to continue with its rescue plan.

Pro-independence parties however are opposed to SLN's latest export bid after the company already had won the right to export four million tons of ore a year for 10 years.

They argue that the resources should be processed in New Caledonia to sustain local employment.

SLN also needs a new power plant for the smelter in Noumea which is due for a furnace upgrade.

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