July 28, 2021

Koniambo nickel: Glencore still hopes for better days

The metallurgical production of nickel is not a long quiet river. In 2020, the North factory has learned this again the hard way. Its production fell by 29%. Blame it on the coronavirus and maintenance operations, according to Glencore …



Ivan Glasenberg, the group’s general manager, who is due to retire this year, will not have had the satisfaction of solving Glencore’s production problems in nickel in New Caledonia. For 2020, the giant of Zug, in the suburbs of Zurich, obtained 239 million dollars from New Caledonian nickel. A result down 24% compared to 2019, according to available figures. KNS adjusted financial result (EBITDA) is negative at $ 196 million. A figure which is however to be put into perspective Glencore having withdrawn from its global activities in raw materials a net profit of more than 11 billion dollars.

Glencore’s headquarters in Baar on the outskirts of Zurich in German-speaking Switzerland



© Alain Jeannin

The health crisis in particular has left its mark

In 2020, the Swiss commodity trading giant Glencore will therefore not yet have succeeded in relaunching production at the Usine du Nord in New Caledonia. The group, in its latest and voluminous annual report 2020, indicates that the production of the Koniambo plant (KNS) fell by 29% in 2020 to reach 16,900 tonnes.

The objective stated when the industrial site was launched in 2011 was to produce 60,000 tonnes of nickel per year. Lowered, the target was reduced to 54,000 tonnes. We are therefore still far from it. Glencore sees two reasons for this poor performance; the coronavirus pandemic and the plant ovens.

“We produced with one oven instead of two for most of 2020. One of the ovens was undergoing scheduled maintenance when restrictions due to Covid-19 were introduced in March, delaying its restart until ‘in October. The second furnace was dismantled for its own maintenance in January 2021, with a restart scheduled for March ”

Glencore Annual Report 2020 published on 03/10/2021

Contacted by the 1st, a member of the management of Koniambo Nickel in New Caledonia estimated that “the presence of Australian specialists in the plant is part of a normal mobility policy which demonstrates the importance and the place that Glencore gives to the plant in the North”.

However, two Caledonian nickel experts expressed a slightly different opinion: “We may be surprised at the lack of explanations on the difficulties encountered and on the strategy developed to rapidly improve the situation”, said these specialists, on condition of anonymity.

One thing is certain, to be profitable and withstand variations in the price of metal at the LME, the plant in the North needs nominal operation of its two furnaces. Glencore intends to achieve this and announces a relaunch of production at the Usine du Nord by the end of March …

Read here Glencore’s 2020 annual report including KNS results and the value of the Koniambo mine

Nickel price at the LME in London, on 03/13/2021: 16,002 dollars / tonne -1.95% – Week -1.93%

KONIAMBO

Usine du Nord – Koniambo Nickel (KNS) – New Caledonia



© Alain Jeannin