New Caledonia's SLN nickel company says after 30 days of strike action its smelter is in an extremely critical situation as ore is in short supply.
SLN says blockades of mining sites by the CSTNC union have forced the smelter to be run at minimum capacity, with the company now losing just under 1.5 million US dollars a day.
The union has been demanding the removal of Filipino workers from another nickel company, the resignation of the government and lower living costs.
SLN has now accused the union leader, Sylvain Nea, of fraud by getting illegal advances for 123 employees, but he has denied this.
Last attempts at talks between the union and the government were abandoned at the weekend when under the influence of alcohol, Mr Nea publicly insulted local and French politicians.
The ruling party has already taken legal action against Mr Nea for alleged incitement to race hatred following his verbal attacks on Filipinos.
Mr Nea is due in court next week after appealing a three-month jail sentence over his role in illegal activities related to a strike at SLN last year.