PARIS, Jan 22 (Reuters) - SLN, the New Caledonia nickel producer controlled by mining group Eramet, said on Monday it was running at reduced capacity after an electrical incident over the weekend caused a local power cut.

The production process at the company's Doniambo plant in New Caledonia was disrupted by the breaking of several furnace cathodes, which in turn destabilised the power grid and caused a power cut of around two hours on Saturday, SLN said in a statement.

The facility, which makes ferronickel for use in stainless steel, was taken off the grid and connected directly to a floating power unit that SLN had hired in 2022 to bolster its power supply, the company said.

Production was continuing at a significantly reduced rate, an Eramet spokesperson said by phone, adding that the incident appeared to be due to multiple factors and it was too early to say when the situation would return to normal.

SLN and New Caledonia's two other nickel processors are currently involved in negotiations to rescue the French Pacific territory's loss-making nickel industry, in which energy supply is one of the main issues. (Reporting by Gus Trompiz; Editing by Susan Fenton)