New Caledonia Nickel Miner Flags ‘Fragile’ Outlook After Restart

Nickel miner Prony Resources New Caledonia SAS warned that its Goro mine in the French territory is economically vulnerable after a recent suspension due to unrest, even as the company restarts operations.

“The shutdown of activities for seven months resulted in a total loss of revenue, putting the company’s cash flow in an extremely fragile situation,” Prony said in a statement on Monday. “Although the restart is a vital step, it does not, on its own, guarantee long-term sustainability.”

The company is one of three major nickel producers in New Caledonia, a remote archipelago in the South Pacific that’s the world’s No. 3 producer of the metal. The local industry is vital to the islands’ economy, but was pushed to the brink of collapse by a slump in prices last year that was triggered by a boom in Indonesian output.

This year, the islands’ worst civil unrest in decades worsened the situation, damaging mines and disrupting supplies from processing plants. The French government is still seeking a deal to put the industry on a steadier footing, with the help of subsidies and investment in renewable energy.

Prony said it was aiming for production of 3,500 tons of nickel a month. The plant makes so-called NHC, a mix of nickel and cobalt chemicals that are used in electric-vehicle batteries.