Eramet's New Caledonia nickel smelter low on ore after protests

PARIS (Reuters) - The nickel smelter of Eramet SA’s SLN subsidiary in New Caledonia is running low on ore due to widespread protests over the sale of another nickel operation in the French Pacific territory, Eramet said on Friday.

Brazilian mining giant Vale’s agreement to sell its New Caledonian nickel activities to a consortium including commodity trading firm Trafigura AG is opposed by pro-independence parties, and violent incidents this week led Vale to suspend its operations on Thursday.

Protests and roadblocks across the territory have also halted operations at SLN’s nickel mines and were preventing mineral ore being delivered to its Doniambo smelter, an Eramet spokeswoman said.

“The situation is critical,” she said. “Ore stocks at the factory are at their lowest in 20 years.”

SLN has already reduced the power of the three furnaces in order to use less ore, and if deliveries are not resumed it risked having to shut one of the furnaces permanently, the spokeswoman added.

SLN’s Chief Executive Guillaume Verschaeve told local channel Nouvelle-Caledonie La Premiere on Thursday that ore supplies would have to resume “early next week” to avert the possibility of a furnace shutdown.

SLN has been trying to recover from years of losses by lowering costs and increasing exports of low-grade ore.

In September, it asked a court to appoint an expert to facilitate a rescue plan, after Eramet warned that loans granted in a previous recovery effort were running out.

Reporting by Gus Trompiz; editing by Jonathan Oatis