France is set to make a bailout deal to save the struggling nickel industry in the New Caledonia region before the end of March, finance minister Bruno Le Maire said as cited by Reuters.
The government of France has been holding talks to salvage the loss-making nickel industry and has drawn up a deal to continue providing support. Under the proposed deal, the state would subsidize energy prices alongside local authorities for up to 200 million euros a year and invest in electricity production benefiting local nickel plants.
"I'm calling for the nickel pact to be signed by the end of March ... as it was drafted," Le Maire told journalists.
Local nickel plants in New Caledonia are facing fierce competition from cheap production in Indonesia, the world's top producer. According to Le Maire, the state aid would help lower their production costs and allow them to become profitable. The nickel firms would also commit to supplying more of their output to Europe for improved critical minerals supply security in the region.
New Caledonia has three nickel processors - KNS, Prony Resources and SLN - that have been on the verge of collapse due to high costs, political tensions and weak international prices linked to Indonesian competition.
Theodor Lisovoy, Editor in Chief of the European bureau, Rough&Polished
