Pacific / New Caledonia

Doubt cast over planned restructure of New Caledonia's Vale nickel plant

15:42 pm on 5 December 2019

Doubt is being cast on the feasibility of the planned restructure of New Caledonia's loss making Vale nickel company, which its Brazilian owner has put up for sale.

A photo taken on May 27, 2015 shows Brazilian Vale's nickel processing plant of Goro in southern New Caledonia. Photo: AFP PHOTO / FRED PAYET

After spending an estimated $US9 billion on the South Pacific's largest industrial plant, Vale's sale plan involves a new production strategy which will entail an unspecified number of job losses among its 1300 employees.

It also wants to raise money by exporting two million tonnes of low-grade nickel ore a year.

However, the NGO, Together for the Planet, or EPLP, said such exports were illegal.

It pointed to a 2010 law which defines the ore deposits feeding the plant at Goro as a geographic reserve, meaning they could only be exploited if they were processed in New Caledonia.

The organisation said it feared a law change could be pushed through if blackmail was applied by warning that too many jobs were on the line.

The same restrictions applied to the Koniambo nickel plant, in the north of New Caledonia, whose ore deposits also had to be processed in New Caledonia.

EPLP also said it was still awaiting a ruling from a French appeal court on its challenge of a New Caledonian government decision to issue a mining licence.

It said in light of these issues, Vale was selling just hot air.

Political parties disappointed at announcement

Local political parties have expressed their disappointment at the Vale announcement that it was selling its New Caledonian nickel assets.

The loss making plant at Goro became the most expensive industrial site in the South Pacific when production was launched three years ago.

Louis Mapou, of the pro-independence UNI party, said New Caledonia had paid a high price in terms of concessions made to the multi-national investor and now Vale could not be granted a blank cheque to proceed.

He said efforts had to be made to get subsequent investors to strengthen engagement in New Caledonia, adding that the planned sale also destabilised the territory months out from the referendum on independence from France.

The newly-formed Generations NC party called for a meeting of the Southern Province Assembly to obtain clarity over Vale's recent decisions, suggesting the company had withheld key information.

It said it believed that contrary to the announcements, Vale had a buyer in sight.

It also said it struck it as odd that a new strategy was being put in place while usually a new investor would choose it.

And it wanted an explanation as to why a massive investment was decided in September only to write off half of the plant's value weeks later.

The government of the Southern Province said it would be attentive and demanding in how Vale treated its employees and subcontractors through the change.