MELBOURNE, Jan 24 (Reuters) – New Caledonian nickel producer Prony Resources is facing an “alarming” situation amid a slump in metal prices as it waits for the possibility France will offer monetary support for the territory’s nickel sector, a company spokesperson said.
Prony’s struggles highlight the troubles of the French Pacific island territory’s nickel industry, the fourth-biggest producer of nickel ore globally, as prices have plummeted 40% in the past year on surging Indonesian supply.
After years of losses, France is trying to work out an agreement by the end of the month to bolster the producers through investments to help reduce costs.
Prony, which is backed by commodity trade house Trafigura, warned staff as early as August that it could run out of cash by year end, company spokeswoman Adelie Garaud Ballande said in an email on Tuesday.
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