Nickel, paradise and ‘emancipation’: Mining bust creates ghost towns | The Pacific

Key Concepts:

• Nickel mining in New Caledonia
• Koniambo Nickel SAS (KNS) / "Usine du Nord" (Northern Factory)
• Economic independence of New Caledonia from France
• Rééquilibrage (rebalancing) - reduction of inequalities
• Impact of Indonesian nickel flooding the market
• Glencore's withdrawal
• Independence movement in New Caledonia
• Community-based economy

1. The Situation at Koniambo Nickel (KNS) and its Impact

• The Koniambo Nickel SAS (KNS), also known as "Usine du Nord" (Northern Factory), was a major nickel mining project in New Caledonia, majority-owned by the local Kanak Northern Province government. Glencore held a 49% stake.
• The mine aimed to boost the economy of the Northern Province, a region with a higher indigenous Kanak population and less development than the south. It was intended to promote "rééquilibrage," the reduction of inequalities.
• The mine's closure in August due to financial difficulties has had a devastating impact. The site is now largely deserted, a stark contrast to its previous bustling activity.
• The closure has led to job losses, financial problems, and a lack of investment in the region. One person interviewed said, "les gens voilà ben ils sont bien emmerdés on va dire ça comme ça mais euh voilà il y a plus de salaire euh problème de finances il y a plus d'investissement euh c'est assez difficile" (people are really screwed, let's put it that way, there's no more salary, financial problems, no more investment, it's quite difficult).
• An employee stated that the closure "touche ton inconscient parce que tu étais toujours habitué à avoir du monde et tout et puis d'un seul coup il y a plus personne" (touches your subconscious because you were always used to seeing people and then suddenly there's no one).
• The project was initially conceived as a political initiative supported by independentists, primarily Kanaks, who wanted a factory in the north.

2. Economic Challenges and the Nickel Market

• New Caledonia holds at least 5% of the world's nickel reserves. The nickel industry accounts for a quarter of the territory's private employment and 6% of its GDP.
• The viability of New Caledonian nickel operations has been undermined by the flooding of the market with cheap nickel from Indonesia.
• Glencore withdrew from the KNS project, citing its inability to justify funding non-profitable operations to its shareholders.
• The future of the mine is uncertain due to ongoing political unrest, competition from low international nickel prices, and a large debt.
• Diversification of the New Caledonian economy has been discussed for decades, but alternative industries generate far fewer resources compared to the massive investments in nickel.
• The "usine du nord" represents 1000 milliards.

3. Impact on Local Businesses and Communities

• The closure of the mine has affected local businesses that relied on it. An auberge (inn) created to house KNS personnel experienced a significant drop in occupancy, going from 50% occupancy in normal times to 100% during shutdowns, and now facing potential closure.
• The population in the VKP area more than doubled due to the mine, and job losses now represent almost 30% of the population.
• Many people are leaving New Caledonia due to the battered economy, with an estimated 10,000 people leaving the island last year alone.

4. Independence Movement and Economic Sovereignty

• The nickel project was intended to support New Caledonia's economic independence from France.
• Henriette Maymevic, a member of the Northern Province Congress, stated that "pour nous l'indépendance c'est une ouverture vers le monde en ce moment nous on on est contraint euh par l'État français de comment de nous développer en fonction de la vision de l'État français et de l'intérêt de l'État français l'indépendance pourrait nous ouvrir ces portes là de nos partenaires dans le Pacifique" (for us, independence is an opening to the world, at the moment we are constrained by the French state in how to develop according to the vision of the French state and the interests of the French state, independence could open these doors to our partners in the Pacific).
• The independence movement sees independence as a way to open doors to partnerships in the Pacific region, currently constrained by France's vision and interests.

5. Community Resilience and Alternative Livelihoods

• Despite the economic hardship, there is a sense of community resilience. People are selling what they can and sharing with family.
• An elder stated that "même en restant à la tribu on n'est pas des chômeurs on a toujours quelque chose à faire" (even staying in the tribe we are not unemployed, we always have something to do), highlighting the importance of community-based activities.
• One person interviewed is growing lemons and other crops as a side business to supplement income.

6. The Future and Potential Solutions

• The best challenge is to involve a new buyer to try to rework a new business model that is more profitable.
• There is hope that a new investor can be found to revive the mine and implement a more sustainable business model.

Synthesis/Conclusion:

The closure of the Koniambo Nickel mine has had a profound and multifaceted impact on New Caledonia, affecting the economy, local businesses, communities, and the independence movement. The situation highlights the challenges of relying on a single industry, the vulnerability to global market forces, and the importance of economic diversification. While the future remains uncertain, there is a strong desire to find a solution that will revitalize the mine, promote economic independence, and ensure the well-being of the people of New Caledonia. The community's resilience and the pursuit of alternative livelihoods offer a glimmer of hope in the face of adversity.