The miner said market conditions and other external factors had badly impacted the project, leading to its decision to only provide funding for the operations of KNS until the end of February 2024.

"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."

Glencore also noted that 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.

Koniambo, which is owned and operated by Koniambo Nickel SAS, a joint venture between Société Minière du Sud Pacifique (SMSP) and Glencore, is one of the largest nickel laterite deposits in the world, with around 151 million tonnes of ore grading at 2.58% nickel.

The mine began production in 2013, and was expected to operate for at least 25 years.

The Koniambo Nickel mine employs over 1,000 people, including contractors. This makes it one of the largest employers in New Caledonia.

Pulling out of Koniambo will boost the miner's emissions targets - In line with the company's Scope 1, 2 and 3 emissions reduction targets, Glencore targets a 15% reduction by the end of 2026 and a 50% reduction by the end of 2035.

Glencore noted that regular operations on-site are expected to persist without disruption for now, and the company will also extend support to KNS in exploring alternative processing methods.

Unless alternative support is found, it could be a sad end for a mine launched as "one of the world's lowest-cost nickel mining operations". This didn't account for the rise of Indonesia as a competitor.

Indonesia has become dominant as a source of low-cost nickel in the past five years, thanks to a combination of abundant reserves, favorable government policies, strategic location, and investments in processing infrastructure.