SLN Nickel France's performance in the second half of 2020, particularly the improvement in production costs, demonstrates that the corporate rescue plan to ensure the sustainable recovery of the Group's New Caledonian subsidiary is having a full impact under normal operating conditions.
It is worth noting that SLN's rescue plan is based on three levers: a new business model based on factory nickel-iron production and nickel ore exports, improved productivity and lower energy prices.
As a result, SLN has applied to the government of New Caledonia to authorise the export of an additional 2m tonnes of nickel per year, an application that is still being voted on.
On the energy front, there is a new power plant that will significantly reduce electricity costs, which has been officially opened for tender and is expected to go to tender in February.
However, since the beginning of 2021, the SLN's situation has become critical as all its mining centres have been affected by intermittent blockages that have lasted for several weeks.
In effect, the company is a collateral casualty of a local conflict involving Vale Nouvelle-Caledonie.
Due to the mining disruption, SLN has been forced to adjust its daily mining and metallurgical operations, which has also affected the loading and export of nickel vessels.
The severe deterioration of operations put the plant's furnaces at risk and placed a financial burden on the company.
Significant progress on the 2020 rescue plan could be undone.
Against this background, the SLN, which is currently undergoing the provisional authorisation process, will make a request for the mediation process before the President of the forthcoming Noumea Mixed Commercial Court.
If the company's condition continues to deteriorate over the next few weeks, you may need to consider applying for protection, administration or liquidation.
All relevant stakeholders must demonstrate their commitment to ensure the resumption of normal operations and the continued smooth implementation of the rescue plan, and Eramet will keep the market informed of developments.
