(Bloomberg) -- Glencore Plc said it will only keep funding its struggling Koniambo Nickel mine until February, as the commodity behemoth loses patience with a project that’s failed to make money for years.
Glencore is one of the world’s biggest nickel producers, but its New Caledonia mine has been a constant source of frustration as it continues to lose money in a market transformed by a surge in supply from Indonesia.
The company said Wednesday that it has told the unit’s board that it will only fund the operation until the end of February. Glencore said it will work with the unit to find alternate sources of funding.
A huge Indonesian expansion of low-grade nickel production led to a surplus, but processing innovations have allowed that glut to be refined into a high-quality product that’s hitting the battery market. The rising Indonesian supply has helped drag prices down more than 30% this year, and analysts say there could be further declines in store as more metal makes its way to the London Metal Exchange.
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