Caledonian nickel producer Koniambo Nickel SAS (KNS) said on Tuesday (3 September) that discussions surrounding the purchase of Glencore’s 49% stake in KNS are continuing, despite the shutdown of its furnaces over the weekend.

Whilst the New Caledonia region is believed to hold some of the world’s largest nickel reserves, the industry in the region has been struggling.

KNS halted its mining and plant operations in March after mining giant Glencore decided to sell its stake in the company.

At the time, Glencore agreed to pay worker salaries and for the furnaces to be kept alight until the end of August.

When fully operational, KNS registered a nickel production capacity of 60,000 tonnes per year.

Alexandre Rousseau, vice-president of KNS, told Reuters that switching off the furnaces meant most of the 1,200 employees have lost their jobs.

Rousseau explained there were three separate groups interested in the potential investment, with two now holding advanced discussions with Glencore about purchasing the 49% stake.

Both groups intend to visit the KNS site in the north of New Caledonia in the coming weeks.

A spokesperson from Glencore told the news agency that KNS was in control of maintaining the furnaces.

The decline of the New Caledonia nickel industry has also affected other companies. French mining group Eramet announced its subsidiary SNL has continued to operate at minimal capacity, while local nickel processor Prony Resources has been forced to suspend its operations.

Despite the New Caledonia nickel industry suffering, GlobalData projects global nickel production will increase from 3.35 million tonnes (mt) in 2023 to 3.56mt in 2024.