Glencore has been working for years to identify a path toward a cost effective, reliable Koniambo Nickel SAS (KNS) business that can meet production and financial targets. While significant progress has been made in productivity performance and reliability, KNS continues to struggle financially and incur significant losses largely due to factors outside of its control relating to cost structures and market conditions. A recent report from the French Inspector General of Finance (IGF) into the nickel industry in New Caledonia acknowledged the significant challenges experienced by the industry, including KNS, as well as the need for far reaching changes to address these challenges and make the production of nickel on island viable.

Glencore has informed the Board of KNS that it will only provide funding for the operations of KNS until 29 February 2024. During this period, Glencore will work with KNS and relevant stakeholders to explore solutions for KNS' ongoing losses, including looking for alternative sources of funding for KNS.

At this time, we anticipate activities on site will continue as normal. Glencore will continue to provide financial support during this period, according to the budget, and remains committed to ensuring that KNS operates safely, maximising production and reducing costs. We will also continue to support KNS to explore alternative processing routes, lock down reverse polarity improvements, and study any other initiatives to help increase the value of the operation.

Beyond Glencore's significant funding of KNS – amounting to US$3.9 billion dollars since the acquisition of Xstrata, and a total of US$9.0 billion since project inception – Glencore has supported KNS in building capacity in the local workforce and developing a contractor ecosystem; embedded internationally recognised operating and safety standards; brought wider socio-economic benefits and contributed to the community; and investigated paths toward an energy transition.

Glencore will continue to work with KNS, our shareholder partner and the French Government over the coming months to determine whether any of the solutions identified in the IGF report can be implemented and whether there are other funding options for KNS.

Further updates will be issued as appropriate.

For further information please contact:
Investors
Martin Fewings