French mining group Eramet faces a stoppage from Thursday at some of the mines operated by its troubled New Caledonian nickel subsidiary SLN in a dispute with local authorities over financial guarantees.
SLN is preparing to suspend activity at its mines in New Caledonia’s northern province after the provincial government rejected a short extension of the guarantees, which are required to cover potential environmental restoration, Eramet said in an emailed statement.
Eramet said it was working with the French government on an agreement to extend the relevant guarantees, which expire on Wednesday, for a 12-month period.
Eramet has provided such guarantees since 2020 for SLN given that the nickel producer has been unable to do so itself, the group added.
SLN, which processes its mined nickel at a smelter in southern New Caledonia, is involved in wider discussions to salvage the loss-making nickel industry in the South Pacific territory.
The French government has been negotiating a rescued package for the industry, involving hundreds of millions of euros in loans and subsidies in return for a revamp of mining permits, exports and energy infrastructure.
But an end-March deadline set by Paris to sign off the deal was missed as New Caledonian parties continue to debate the proposals amid wider political tensions divided between pro-independence and loyalist parties.
(By Gus Trompiz; Editing by Leslie Adler)