Skip Header
Important information: The value of investments can go down as well as up so you may get back less than you invest. Investors should note that the views expressed may no longer be current and may have already been acted upon. This is a third-party news feed and may not reflect Fidelity’s views.

Glencore to close unprofitable New Caledonian nickel mine

(Sharecast News) - Mining and commodities giant Glencore has announced that it is calling time on its Koniambo Nickel SAS (KNS) mine in New Caledonia after having invested more than $4bn into the project over the past decade without seeing a return. The mine, which is a joint venture between Société Minière du Sud Pacifique and Glencore, who own 51% and 49% stakes respectively, is now being transitioned into so-called "care and maintenance".

Glencore said it will continue to fund the operation according to an agreed budget, and the furnaces will remain hot for six months, as it starts a process to identify a potential new industrial partner.

"This decision follows several months of extensive discussions and negotiations with relevant government and other key stakeholders. Even with the French government's proposed assistance, high operating costs and current very weak nickel market conditions means KNS remains an unprofitable operation," Glencore said in a statement.

Glencore has held the KNS asset since its acquisition of Xstrata back in 2013, being the primary funder "without ever realising a profit", while the mine has contributed $5.6bn in economic benefits to New Caledonia (since 2012).

The FTSE 100-listed company said it is appreciative of the French government's efforts to revitalise and rescue the nickel industry in New Caledonia, but added that, "even with the proposed assistance, KNS remains an unsustainable operation and Glencore cannot justify continuing to fund losses to the detriment of its shareholders."

Glencore, which was trading more or less flat after markets opened on Monday, rose 1.3% on the news by mid-morning at 390p by 1125 GMT.

Share this article

Related Sharecast Articles

Easyjet suspends flights to Israel until October
(Sharecast News) - Budget carrier easyJet on Tuesday said it had suspended flights to Tel Aviv until October 27 after Iran's missile and drone attack against Israel on Saturday night.
Berenberg stays at 'buy' on Yellow Cake on tight supplies and supply risk
(Sharecast News) - Analysts at Berenberg stood by their 'buy' recommendation for shares of Yellow Cake, the uranium oxide concentrate holding company, following a fireside chat with its boss, Andre Liebenberg.
Bank of America upbeat despite profits slide
(Sharecast News) - Bank of America said it had seen a "strong" first quarter on Tuesday, despite posting a sharp fall in profits.
Berenberg lowers target price on Kainos
(Sharecast News) - Analysts at Berenberg lowered their target price on software company Kainos from 1,315.0p to 1,260.0p on Tuesday following the group's full-year trading update on 15 April.

Important information: This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to one of Fidelity’s advisers or an authorised financial adviser of your choice. When you are thinking about investing in shares, it’s generally a good idea to consider holding them alongside other investments in a diversified portfolio of assets. Past performance is not a reliable indicator of future returns.

Award-winning online share dealing

Search, compare and select from thousands of shares.

Expert insights into investing your money

Our team of experts explore the world of share dealing.