Eramet said Wednesday evening that it had sealed an agreement with the French government to continue the mining activities of its nickel subsidiary SNL in the northern province of New Caledonia.

Under the terms of this agreement, the French group said in a press release, the financial guarantees granted to SNL have been extended, which should de facto avoid the shutdown of its loss-making subsidiary.

Eramet pointed out that SNL had always operated with "constituted financial guarantees" and had to provide financial guarantees to the Caledonian provinces concerned in order to "guarantee the reclamation and rehabilitation of mining sites after their definitive closure".

"Given its financial situation, SNL has been unable to provide these guarantees on its own since 2020", added the group.

Broader discussions are underway with the government and local authorities to save New Caledonia's loss-making nickel industry.

The French government has proposed a rescue plan, with hundreds of millions of euros in loans and subsidies, in exchange for an overhaul of mining contracts, exports and energy infrastructure. But political tensions between pro-independence and loyalist parties have so far prevented an agreement from being reached. (Gus Trompiz and Kanjyik Ghosh; Jean Terzian)