Glencore to sell stake in New Caledonia mines as nickel price tumbles

Nickel is a chemical element, pure industrial use or in metal alloys, corrosion resistant, stainless steel

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Glencore (OTCPK:GLCNF) (OTCPK:GLNCY) said Monday it will seek to sell its 49% stake in the Koniambo Nickel joint venture in New Caledonia, driven by a sharp slump in nickel prices that has forced several mines in Australia to shutter, despite growing demand for the metal from the electric vehicle sector.

Glencore (OTCPK:GLCNF) (OTCPK:GLNCY) said it will transition the mine to care and maintenance status with a six-month winding-down period while it seeks a new investor.

“Even with the proposed assistance [from the French government], KNS remains an unsustainable operation and Glencore cannot justify continuing to fund losses to the detriment of its shareholders,” the company said.

The move to halt production should allow Glencore to avoid a negative impact on core earnings of up to $400M, with a full annual saving likely from 2025, Citi analysts said.

A flood of new supply from Indonesia has sent nickel prices plummeting 42% over the past 12 months.

William Murphy

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