https://www.miningweekly.com
Energy|Flow|Projects|Resources|System|Flow|Solutions|Operations
Energy|Flow|Projects|Resources|System|Flow|Solutions|Operations
energy|flow-company|projects|resources|system|flow-industry-term|solutions|operations

New Caledonia's Prony Resources faces cash crunch on nickel slump

24th January 2024

By: Reuters

  

Font size: - +

MELBOURNE - New Caledonian nickel producer Prony Resources is facing an "alarming" situation amid a slump in metal prices as it waits for the possibility France will offer monetary support for the territory's nickel sector, a company spokesperson said.

Prony's struggles highlight the troubles of the French Pacific island territory's nickel industry, the fourth-biggest producer of nickel ore globally, as prices have plummeted 40% in the past year on surging Indonesian supply. After years of losses, France is trying to work out an agreement by the end of the month to bolster the producers through investments to help reduce costs.

Prony, which is backed by commodity trade house Trafigura, warned staff as early as August that it could run out of cash by year end, company spokeswoman Adelie Garaud Ballande said in an email on Tuesday.

"Unfortunately, at the end of 2023, our fears were confirmed, aggravated by a collapse in nickel prices on the markets and production below budget .... In the short term, the issue is to keep the cash flow going while waiting for support solutions," she said.

Companies in other high-cost nickel-producing regions have announced restructurings and writedowns as prices have dropped. Demand for nickel, a key component of advanced electric batteries, has surged on the global transition to electric vehicles and Prony inked a supply agreement with Tesla in 2021.

In November, French Economy Minister Bruno Le Maire said New Caledonia's three main producers, Eramet-backed , Glencore's Koniambo Nickel (KNS) and Prony, would need 1.5-billion euros ($1.63-billion) in short-term financing.

The French government would contribute to other projects, including an overhaul of New Caledonia's energy system that has made local ore processing costly, but would not bail out the sector, he said.

Prony is 51%-owned by New Caledonia's territorial authorities and other local interests, while Trafigura has a 19% stake and the rest is held by a joint venture between Prony and investment firm Agio Global.

Prony's stakeholders bought the loss-making nickel operations in the French territory from Brazil's Vale in 2021. It set out to double production to 44 000 t in 2024 from 2021 levels.

Edited by Reuters

Comments

Showroom

Goodwin Submersible Pumps Africa (Pty) Ltd
Goodwin Submersible Pumps Africa (Pty) Ltd

Goodwin Submersible Pumps Africa is sole distributors for Goodwin electrically driven, submersible, abrasion resistance slurry pumps.

VISIT SHOWROOM 
ESAB showroom image
ESAB South Africa

ESAB South Arica, the leading supplier of high-end welding and cutting products to the Southern African industrial market is based in...

VISIT SHOWROOM 

Latest Multimedia

sponsored by

Magazine round up | 12 April 2024
Magazine round up | 12 April 2024
12th April 2024

Option 1 (equivalent of R125 a month):

Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format

Option 2 (equivalent of R375 a month):

All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.

Already a subscriber?

Forgotten your password?

MAGAZINE & ONLINE

SUBSCRIBE

RESEARCH CHANNEL AFRICA

SUBSCRIBE

CORPORATE PACKAGES

CLICK FOR A QUOTATION







sq:0.104 0.138s - 109pq - 2rq
1:
1: United States
Subscribe Now
2: United States
2: