Table of Contents
Key Points
- Glencore, which announced its intention to sell its stake in the loss-making KNS earlier in the year, halted operations at the site in March 2024.
- High costs, unrest, and shutdowns hit New Caledonia's nickel sector, disrupting operations and investor confidence.
- EV battery demand fuels interest, as Glencore explores strategic investments in energy and emerging markets.
Glencore Plc, led by South African executive Gary Nagle, has received two bids for its 49 percent stake in Koniambo Nickel SAS (KNS), a struggling nickel producer in New Caledonia.
The offers, disclosed by KNS President Alexandre Rousseau, follow site visits conducted late last year and come amid significant challenges for the region’s nickel industry.
Stake sale amid sector challenges
Glencore, which announced its intention to sell its stake in the loss-making KNS earlier in the year, halted operations at the site in March 2024. Despite a six-month window to secure a buyer, no viable offers emerged, leading to the shutdown of KNS's furnaces in August.
Rousseau disclosed that two groups—both of which had shown prior interest—submitted formal offers after conducting site visits between October and December. While specific details about the bids remain undisclosed, he confirmed that KNS's shareholders, including SMSP, which holds a majority 51 percent stake, are currently reviewing the proposals.
Broader Nickel industry struggles
KNS’s struggles mirror broader challenges faced by New Caledonia’s nickel industry. High operating costs and ongoing losses have weighed heavily on producers. In May 2024, riots erupted over electoral reforms, further disrupting operations and damaging investor confidence.
Other players in the region are also grappling with instability. Prony Resources, which halted production for seven months following the unrest, resumed operations in December. The company is actively seeking new partners to replace minority stakeholders, including commodity trader Trafigura.
Meanwhile, Societe Le Nickel, controlled by French mining group Eramet, continues to operate at reduced capacity due to the partial blockage of its mines.
Glencore's strategic focus
Under Nagle’s leadership, Glencore has continued to solidify its standing as a dominant force in global commodities, boasting a portfolio of over 60 commodities. With a workforce exceeding 150,000 employees and contractors, and operations spanning over 35 countries, the company maintains a robust presence in both developed and emerging markets.
Recent moves include exploring New Fortress Energy’s LNG assets in Jamaica and a $116 million investment in a 100-megawatt solar plant in South Africa, in partnership with Pele Green Energy.
Global Nickel demand and investor interest
Despite challenges in New Caledonia, nickel remains a critical material for electric vehicle (EV) batteries and renewable energy technologies. South African metals producer Sibanye-Stillwater has expressed interest in sourcing battery-grade nickel but ruled out acquisitions.
Prony Resources recently confirmed plans for a site visit by a potential investor, signaling ongoing interest in the region’s strategic nickel assets.
