Island of Nickel Losing Money as World's Mines Shun Output Cuts
- Hoping to outlast rivals after billions spent in New Caledonia
- Global surplus has left price far below cost of unearthing ore
A nickel mine on the island of New Caledonia.
Source: De Agostini Picture LibraryOn a remote island in the Pacific Ocean, mine owners like Glencore Plc and Vale SA are losing money on every ton of nickel they unearth in what amounts to a contest to see who can endure the agony longer.
A prolonged surplus of nickel has sent prices plunging to a 12-year low and below the cost of production for more than two thirds of the world’s mines. Nowhere is the strain more acute than in New Caledonia, a former Napoleonic penal colony 1,000 miles from Australia’s eastern coast that drew billions of dollars in investment when the metal reached a record before the financial crisis. Now, an island with 15 percent of the planet’s reserves has become a cautionary tale for an industry unwilling to curtail supply.