New Caledonia nickel sector set for big blow

Transcript

Photo: RNZ / Johnny Blades

New Caledonia's vital nickel sector continues to suffer setbacks.

It has been announced in Paris that plans to build a new power plant for the SLN nickel company in Noumea is on hold.

This comes at a time of uncertainty in the industry and amid political divisions.

Koro Vakauta asked editor Walter Zweifel about the significance of the delay with the power plant.

WALTER ZWEIFEL: In order to produce nickel, a lot of electricity is needed and the SLN plant in Noumea, which is the biggest private sector employer in the territory, needs to have electricity supply.  The plant being used at the moment is old.  There has been a concession for it to be used while a new plant was in the pipeline.  However, now there has been this decision by Eramet, which is the parent company of SLN in Paris, saying a decision has been put off until next year.

KORO VAKA'UTA:  So what's the reaction been to all of this in New Caledonia?

WZ:  Well the governor of the southern province of course is shocked that this has happened like this.  Philippe Michel, who is president of the southern province, says this deferred announcement is akin to the whole project being stopped.  You have to keep in mind that if there is no electricity for this plant, then the SLN plant could fold. You also have to keep in mind that figures coming out of Paris suggest that SLN is on track to losing about 300 million US dollars in one year.

KV:  And nickel prices have been depressed, what can be done?

WZ:  There is a big concern in New Caledonia about the state of the nickel price, given that New Caledonia has some of the largest reserves in the world, given that New Caledonia's economy is in a way primed to take advantage of this reserve with three huge nickel smelters in the territory.  One company in the north has contracts with South Korea.  There is a push by truck drivers and owners of smaller mines to expand exports to China.  They want to make money and find a market for the commodity.  The discussions are very fraught and, as some people remember, there was a strike back in August with these truck drivers blocking much of New Caledonia for several weeks in an effort to get the government to change to allow for these exports to China.  The issue was put on hold.  We had a meeting in congress last week where a majority thought that the current policy should be changed and that exports to China should be opened up.  The division is deep. The two sides don't run along the conventional political divide, ie. it's not for or against independence.  Here we have pro-independence and anti-independence on either side of the divide.  While this vote was taken, it is not binding on the government, but we have to keep in mind that the government in New Caledonia is made up of all parties represented in congress.       

A photo taken on August 19, 2015 in Noumea shows trucks blocking the Riviere Salee roundabout, as truck drivers blocked the different roundabouts leading to the city with 30-tonne trucks on the 15th day of protests against the government concerning the opening of a nickel ore export canal to China. Photo: AFP