JOHANNESBURG/PARIS - Sibanye-Stillwater said it is studying New Caledonia's Prony Resources as a potential source for nickel it needs to manufacture battery-grade material at its Sandouville plant in France.

The Johannesburg-based precious metals producer is also looking to Indonesia as another potential source for mixed hydroxide precipitate to enable it to produce material for electric vehicle batteries at Sandouville, James Wellsted, a spokesperson for the miner, said on Tuesday.

Prony is part of the loss-making nickel industry in New Caledonia and it has been seeking investors for the business, which comprises a nickel mine and hydrometallurgical processing plant.

While Prony has said it may sell a majority stake, Wellsted said Sibanye is not looking at acquisitions at the moment.

Sibanye is studying plans to convert the Sandouville plant to start processing battery grade nickel as a part of a push into green energy. To advance the Sandouville plant conversion, Sibanye needs to secure supplies for the feedstock first, Wellsted said.

"Part of the feasibility is trying to identify where you're going to get the mixed hydroxide precipitate (MHP), which is the feedstock for the battery metal production at Sandouville," he said.

A team from Sibanye is currently in New Caledonia to study Prony as a potential supplier, he added.

Prony produces MHP, an intermediate nickel product that is suitable for battery supply chains, and the firm previously announced a contract to supply electric vehicle maker Tesla.

Local newspaper Les Nouvelles Caledoniennes reported on Monday that Sibanye is in advanced talks to acquire Prony, citing a source close to the matter.

The report came after Sonia Backes, the head of New Caledonia's southern province where Prony Resources is located, told public broadcaster La 1ere Nouvelle-Caledonie last week that a potential investor was in talks with Prony.

A spokesperson for Prony declined to comment.

The struggling New Caledonian nickel sector this year battered by rioting in the French-controlled southern Pacific territory. Prony's operations have been halted since May due to the unrest.