New Caledonia’s pro-independence group proposes creation of a nickel producers organisation

A pro-independence group within New Caledonia’s Congress has called for an OPEC-like organisation of nickel producers to be created.

The concept of a nickel-exporting-countries organisation, which they call “OPEN” (Organisation des Pays Exportateurs de Nickel) comes from the FLNKS-Union Calédonienne Congress caucus, which has announced plans to submit the idea in the form of a “wish” motion to the Congress for endorsement.

UC-FLNKS spokesman Pierre-Chanel Tutugoro told a press conference in Nouméa the main advantage would be to create a forum allowing exchanges with other world nickel producers, including the new world leader, Indonesia, but also the Philippines, and to ensure world nickel prices are stable.

Indonesia is now considered the world leader in nickel production, at much lower prices than New Caledonia’s nickel, which is regarded as too costly and not adapted to the highest demand in nickel-ready produce for electric car batteries.

Indonesia dominates world market

The new world nickel deal has directly impacted New Caledonia’s nickel industry: one of the three main nickel plants in New Caledonia – Koniambo – KNS, north of the main island – has now been put in non-production sleep mode, threatening some 1300 employees and another 2000 working for subcontractors.

Anglo-Swiss Glencore is now seeking to sell its 49 percent of shares in Koniambo.

KNS, over the past ten years, has accumulated €14 billion (Euro) in losses.

The other two major players in the industry, Prony Resources and Société le Nickel or SLN, a subsidiary of French mining giant Eramet, are also facing a short-term very real risk of bankruptcy.

Last week, the French government announced a series of financial aids for both SLN and Prony, to bail them out of their immediate hardships and avoid closure.

Calls to sign French ‘nickel pact’

But the assistance is conditional to the signing of a so-called “nickel pact”, which would commit all signatories – companies and political entities – to engage in far-reaching reforms.

These are aimed at lowering the cost of production and diversifying their target markets, other than Asia, so as to increase competitiveness towards European car producers in need of nickel to produce batteries for their new generation electric vehicles.

The date of March 25 has been suggested by the French Ministry of Finance to sign the pact.

SLN’s director Jérôme Fable has urged all interested parties to sign the new deal so that they can all benefit from the hundreds of millions in French assistance.

He told public broadcaster Nouvelle-Calédonie la Première last week “there is a wave of ultra-low cost (nickel) production coming from Indonesian and Chinese producers”.

“They control 75 percent of the (world) market.

“We have to be able to resist that. But those who will be able to resist are those who will get help. So we have to make the right decisions.

“We, all the nickel producers, have already said we will sign (the nickel pact)”, he said, adding the ball was now in the politicians’ court.

“They have the powers; they have to sign it too. We are relying on collective intelligence.”

The French “pact” is also believed to do away with a controversial “nickel doctrine” preventing New Caledonia’s producers from selling only raw, unprocessed ore and instead export processed metal in order to add value.

But in the current market conditions, in New Caledonia, the export of raw ore is profitable while locally-processed metal production and export is not.

Last week, New Caledonia’s head of government Louis Mapou announced a series of “emergency” measures, aimed at assisting employees in the nickel sector – estimated to be at least 1000 people – directly affected by the local crisis.

These measures included special unemployment benefits and easier terms with local banks.

The nickel industry currently employs up to 25 percent of New Caledonia’s workforce.

According to the news on Radio New Zealand

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