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New Caledonia Travel Guide

Mining Industry

New Caledonia ranks third in world nickel production (after Canada and Russia), and nickel accounts for the vast majority of territorial exports. The nickel ore is high grade, being free of arsenic, although the presence of asbestos has been linked to a high lung cancer rate among miners. Chrome and iron ore were formerly exported, but these operations have closed due to market conditions.

There are large nickel mines at Thio, Poro, Tiébaghi, and Népoui, and many of the deposits are on mountaintops. In 1990, Kanak-controlled North Province purchased Jacques Lafleur's Société Minière de Sud Pacifique for US$19 million. The other large mining company, Société le Nickel (SLN), which owns the pyrometallurgic smelter at Nouméa, belonged to the Rothschild conglomerate until its nationalization in 1982. Today it's part of the Eramet consortium and 30 percent of SLN shares are owned by the provincial governments. Five smaller mining companies also operate.

To break the French monopoly over nickel processing and to rebalance economic power in the territory, the SMSP negotiated an agreement with the Canadian mining corporation Falconbridge to build a second nickel refinery in North Province, an arrangement long opposed by Eramet. In 1997, the FLNKS suspended all political negotiations with the French government until the issue was resolved, and in early 1998 Eramet finally agreed to transfer unused nickel reserves at Koniambo near Koné to the SMSP, thereby making the project feasible. Owned 49 percent by Falconbridge and 51 percent by the SMSP, Koniambo Nickel SA involves a US$3.8 billion investment in a pyrometallurgic smelter at Koné, producing 60,000 tones of nickel a year. In 2006 Swiss Xstrata acquired Falconbridge in a hostile takeover and development is continuing.

In 2001, another Canadian mining giant, Inco, announced plans for a US$3.2 billion hydrometallurgical smelter on the Goro Plateau between Goro and Prony Bay in the south. The massive Vale Inco project is 69 percent owned by Inco, 21 percent by a Japanese consortium called Sumic, and 10 percent by the three provincial governments. The smelter is designed to produce 60,000 tones of nickel and 5,000 tones of cobalt each year but massive cost overruns and low nickel prices have caused repeated delays. Construction (by 4,000 Filipino workers) began in 2005 with limited production from 2009. Environmentalists have pointed to the heavy price that will be paid as the unique flora of the Plaine des Lacs is disrupted and vast quantities of liquid wastes are pumped into the sea, killing the World Heritage-designated reefs.

In 1999, it was announced that one of the world's largest deposits of natural gas had been discovered in 600 meters of water 230 km southwest of Grande Terre, close to the boundary with Australia. Huge oil deposits may also be present in the area.

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