Transcript
WZ: The main worry is about employment. Vale has about 1,300 people on its payroll and a similar number of contractors whose future is uncertain. The hope among everybody is that the change announced by Vale will have a minimal impact. There is a sense of acceptance that jobs will be lost because Vale will close its nickel refinery and concentrate on producing NHC, or nickel hydroxide cake, which Vale says is in great demand for batteries for electric vehicles. The government of the Southern Province where the plant is located says it wants to strike a deal with Vale to fund a plan to find work for those being made redundant. How many jobs will be lost is not yet known.
BRD: Vale plans to export some of the nickel ore to raise funds. What has the reaction been?
WZ: Here the views are quite divergent. An NGO, Together for the Planet, or EPLP, says such exports are illegal. It has pointed to a 2010 law which defines the ore deposits feeding the plant at Goro as a geographic reserve, meaning they can only be exploited if they are processed in New Caledonia. The NGO fears that a law change can be pushed through if Vale threatens with more job losses. On the pro-independence side, there is dismay about the way things have gone.
BRD: How so?
WZ: The stance taken by them seems to be more nationalistic and long-term. This means that the they view the nickel resource, which accounts for just about all export earnings, as a finite asset which is supposed to sustain New Caledonia for decades. From this perspective, the ambition of Vale to try to return to profitability is seen as the simple action of a multi-national which has been allowed to enter New Caledonia on favourable terms. There is also a political dimension to the nickel resource which reverberates in the background.
BRD: Is that linked to the Noumea Accord?
WZ: In a way it is. Part of the Accord meant that the mainly Kanak northern province was to be given control over a huge nickel deposit so that it too could have a nickel plant. This was part of the so-called rebalancing plan to lift the poorer Kanak areas to be closer to the richness of the more European south. And as a result of that a nickel plant has been built at Koniambo. Although the southern province always had the SLN plant in Noumea, as the engine of the economy, politicians there wanted to increase nickel production further by allowing in foreign investors in the south. In general, that undertaking has been dogged by problems.
Launched more than 20 years ago, the original project was abandoned, but then taken up by Canadian miner Falconbridge which was taken over by Inco of Canada and then by Vale. There have been delays, there has been acid spills and protests, and there has been sabotage to equipment over the years amounting to tens of millions of dollars. A staggering 9,000 million US dollars has been spent on the project and yet, it's not as profitable as expected.
BRD: Vale is keen to leave, but who may buy the asset?
WZ: No names have been mentioned officially. Many questions are being asked over Vale's various moves in recent times. There is suspicion that Vale has takers in mind and is restructuring with a buyer in mind. The online publication Noumea Post says insiders consider China's Tsingshan as a likely candidate.
Tsingshan already uses the same high-pressure-acid-lead technology for its nickel production as Vale introduced at its plant in New Caledonia. The president of the Southern Province Sonia Backes suggested that there might be no other option but to sell to the China. She said both her province and France are keeping an eye out as China is keen to get established in New Caledonia in the way it did in Vanuatu and French Polynesia.
