The New Caledonian government has rebuffed a bid by the SLN nickel company to cut the number of hours worked at its plant to cope with the economic downturn.
A government spokesman says the delicate situation at SLN is more a sign of the way the company is structured than the result of bad times.
In February, SLN, which is the territory's biggest private sector employer, announced its plans to cut working hours and a 20 percent decrease in nickel production for this year.
The move was opposed by the CSTNC union which held a demonstration outside the government seat for the working hours to be retained.
A report looking at SLN found it was losing 850,000 US dollars a day, in part because the SLN plant and its mines are old which has contributed to an annual increase of 12 percent in production costs, the highest in the world.