Impacts of ‘Big Nickel’


By Emma Clarke

Emma Clarke reports on mining in New Caledonia

Emma Clarke

New Caledonia, home to a wealth of foreign and local business economies, is increasingly dependent on the forces of the international mining industry.

The island territory, however, takes up the posture more as a king than as a pawn in the nickel mining game, as it uses its own richly endowed sites to gain political and economic ground on big international players.

The importance of the industry in New Caledonia is evident on every level of operation, from among the public, to the government, and for the industry and the whole economy – nobody doubts it.

The past five years have seen two big nickel mine sites develop on the North and South of the main island, Grand Terre.

The New Caledonian public owns 51 per cent of Koniambo, the mine in the North, through the regional government there, but has only the smallest interest in Goro, the mine in the South with the rest sold off to foreign investors.

The two new mines join an existing nickel plant close to Noumea, together contributing billions of dollars to the economy and making the territory the world’s second or third largest producer of nickel.

Divisions in the country go together with divisions over how the mineral wealth, and the minerals production should be handled.

Most favour a plan to steadily build up processing within New Caledonia, to value-add, but a powerful lobby within the separatist movement is interested in more urgent sales, to build up funds for social welfare.

There is the widespread animosity also felt over tax benefits given to the huge new mining operations, and the ever present risks of mining to the island environment.

Pollution crises have sparked some of the toughest conflicts, like the confrontations of the past month between gangs of young men and police, which started over a spill of acids.

This month the story of one of the crises of recent years is being told in a documentary, launched at the New Zealand Film Festival. It’s Cap Bocage, recounting what happened with a spillage onto the coastline, “a mountain falling into the sea”, at the cape on the East coast, an area always prized as a place for good fishing, the livelihood of local inhabitants.

The government majority anti-independence group says New Caledonia cannot manage the big business stakes that come with the mines.

Staying politically dependent on France would provide support for New Caledonia and protect the island country from powers in the mining world like Brazil, already prominent in the overseas ownership of New Caledonia’s mines.

“French presence is needed in New Caledonia so we are protected from the likes of Brazil…,” says Vaea Frogier from the conservative party, R-UMP.

“To demonstrate the size of these mines, there are 300 000 people working for the company which owns the south mine alone which either directly or indirectly affects more than 10, 000 New Caledonians.

“New Caledonia is unequipped to deal with those kind of powers. That’s why we want French presence in New Caledonia, to protect us.”

The centre-right position is to say that the nickel production industry must eventually pay into the economy in a big way.

“It is essential, it is the primary economic resource so it is essential in that way. Also in the political sense of the word, we do need to find a solution that satisfies the whole country and meets the needs of the population if we are going to find a political solution to go with it,” she says.

A fiscal stability agreement between the government and mine owners means the mines only have to pay taxes after 15 years of full operation, which neither of the mines are at, despite one at least, Goro Mine, being in partial operation for over five years. Full operation is not expected until another five to ten years.

The agreement is designed to encourage growth and an economic contribution to New Caledonia’s future, along with valuable infrastructure; but it is being seen now as a too-generous deal, taking too much and asking for too much patience.

New Caledonia remains torn ahead of its impending referendum on staying, or not, with France, with one constant in the situation: the importance of mining for nickel will remain.

The new Goro and Koniambo mines, and the existing, long-term mines, together make New Caledonia a major player in international nickel mining.

The question is whether the Kanak people, who have strong political and moral credit as the original occupiers of these islands, will settle on a government that sees France continuing in power, and the bulk of the islands’ mining profits taken overseas.