2023-08-01 23:58:54
At the end of 2022, the government asked the General Inspectorate of Finance (IGF) and the General Council for the Economy (CGE) to establish a diagnosis of the nickel sector in New Caledonia. Objective: to identify avenues for development capable of ensuring the economic viability of the territory’s metallurgical companies. The report has been delivered.
Cécile Rubichon (with AFP) • Published on August 2, 2023 at 10:58 a.m., updated on August 2, 2023 at 12:04 p.m.
The challenges are considerable. At the height of the magnitude of the consequences that would result from the failure of one or more metallurgical companies in the territory. The shutdown of the three nickel factories”would lead to an increase in unemployment in the territory of around 50%“, a catastrophe for the social accounts of New Caledonia, confirms the report issued by the General Inspectorate of Finance (IGF) and the General Council for the Economy (CGE) on the night of August 1 to 2. Not to mention the environmental costs.
The mission, commissioned by the central government in November 2022, visited New Caledonia in the months that followed. There, she met the shareholders, management and employee representatives of the main companies in the sector, as well as the institutional actors competent in mining and metallurgy. And she became convinced that under the current operating conditions, without “new intervention by private actors and public authorities“, the closure of certain nickel mining and processing sites”seems inevitable“. Their short-term financial situation being very precarious, it is urgent to find solutions.
Especially since the Caledonian nickel sector could “theoretically represent” “up to 85%“the needs of French battery giga-factories in 2030, or”14% of the needs of the European Union in 2035“, explains the report. European Union struggling to find enough raw materials to produce a real alternative to heat enginesof which it announced the end for 2035. But today, only one of the three Caledonian factories (Prony Resources) is oriented towards the battery market.
Since 2016, the State has granted nearly 700 million euros in loans (84 billion francs) to two factories (SLN and Prony) and opened 540 million euros in guarantees (65 million francs).
The report should provide food for thought for a working group on nickel which will have to propose “by fall“measures for”consolidate the future of the nickel industry“, indicated Matignon in a press release accompanying the release of the document. Emmanuel Macron had mentioned it when he came to New Caledonia last week. He wants a “future nickel project“with competitive New Caledonian factories, he hammered it. Condition to continue to support the sector.
Experts suggest several transformations. Orient production more towards the nickel battery market in order to serve the European market. Rely on less carbon-intensive energy to reduce energy costs and be able to compete with other industrial operators, particularly in Indonesia, which benefit from much cheaper, subsidized energy and five times lower labor costs to that of New Caledonia. With this same objective of profitability, the mission also recommends reforming the rules relating to export control and geographical metallurgical reserves.
And, beyond that, to rethink the mechanisms for sharing the profits produced between the nickel industry and communities. But it will first be necessary to respond to the urgency of the financing needs to save the metallurgists.
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