Glencore, the Anglo-Swiss mining giant, has announced that it is seeking a buyer for its stake in the Koniambo Nickel joint-venture in New Caledonia, due to ongoing losses caused by a decline in nickel prices. In response, Glencore plans to transition Koniambo Nickel (KNS) into a care and maintenance status, while actively searching for a new industrial partner for the venture. With a 49% stake in KNS, Glencore initially stated that it would cease funding by the end of February.
In just the last month, peer company Trafigura made a similar decision to halt funding for a major nickel operation in New Caledonia. This French territory in the South Pacific was once considered the future of nickel production. However, the recent influx of supply from Indonesia has caused prices to plummet by 42% in the past year.
Despite investing over $4 billion since 2013, Glencore has never seen profits from KNS, which it acquired through the Xstrata merger a decade ago. Given the unsustainable nature of its operations and the detrimental impact on shareholders, Glencore has made the difficult decision to divest its stake in KNS.
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