16 Jan 2023

France giving emergency payment to SLN to try to save the mining firm

12:12 pm on 16 January 2023
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Photo: RNZ / Johnny Blades

An urgent funding boost of $US63 million will be provided to New Caledonia's SLN to try to save the company.

The so-called Urgent Progressional Plan is a short-term measure which could give enough time to formulate a long-term plan to save the company from bankruptcy with the resulting loss of thousands of jobs.

A financial inspection from the Ministry of Finance will be sent to check if the urgent funds are being used to save the company.

The Noumea-based mining company has been experiencing serious financial difficulties due to fluctuating global prices of nickel and a lack of investment in company infrastructure.

Its survival was raised by New Caledonian French Member of Parliament Philippe Dunoyer who asked whether the French government was intending to save the mining company before it goes bankrupt.

"Unfortunately, with the Ukrainian conflict, the costs of energy have become harsh, a killing sword for the society."

French Overseas Minister Jean-Francois Carenco told the French National Assembly that he is in contact with local authorities and other parties involved to come up with a short-term solution.

"To work on it, the government is currently in contact with local authorities to scrutinise not only the situation of SLN but the whole nickel industry in New Caledonia."

Carenco said energy, exportation, and production are areas that should be worked on.

He also said there is the possibility of a recovery plan, however, the situation remains fragile and choices need to be made.

The president of New Caledonia's Southern Province Sonia Backes said in November she expects the French government to come to the rescue of SLN.

She said if the government doesn't write out a cheque, SLN will close this month, which she said is not acceptable for anyone.

SLN is New Caledonia's largest company, employing about 2000 people directly and a further 8,000 indirectly.

Backes said last year that bankruptcy of SLN would not only mean the loss of thousands of jobs but also sink New Caledonia's social welfare system.

New taxes on mineral extraction

The territory's congress hopes that stronger revenues in nickel exportations with the adoption of an exportation tax and royalties on mining extraction.

Sixty percent of the royalties will go to 13 mining districts and 40 percent will feed New Caledonia's distribution budget.

The exportation taxes could bring up to $US27 million.

The tax is set to affect exportations for the years 2023 to 2024.

New Caledonia's Budget Minister Philippe Dunoyer

New Caledonia's Budget Minister Philippe Dunoyer Photo: AFP

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