April 7, 2016 / 1:48 AM / 4 years ago

New Caledonia allows two miners to export nickel ore to China

SYDNEY, April 7 (Reuters) - New Caledonia will allow two companies to export nickel ore to China, ending a long-standing ban as its economy wrestles with weak commodity prices and the potential loss of a struggling Australian customer.

With a quarter of the world’s nickel reserves, the South Pacific French Territory has resisted selling ore directly to large consuming countries such as China in order to preserve its domestic smelting and refining industry, a main source of revenue.

But in change in policy, the government said this week Eramet subsidiary Societe Le Nickel and Ballande-owned Societe des Mines de la Tontouta are free sell a combined amount of up to 700,000 tonnes of low-grade nickel ore, known as laterites, to Chinese buyers over a period of 12 to 18 months.

A slump in nickel prices is putting pressure on New Caledonia’s three smelters, owned by Glencore, Vale and Societe Le Nickel, cutting export revenue for the government. Combined, the three smelters supply 10 percent of world demand for the metal used to make stainless steel.

Queensland Nickel (QNI), one of Australia’s biggest nickel refineries and a long-time buyer of New Caledonia’s nickel, was forced into voluntary administration in January, putting its future in doubt. (Editing by Ed Davies)

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