French Minister for Overseas Manuel Valls left New Caledonia at the weekend after a one-week stay which was marked by the resumption of inclusive political talks on the French territory’s future.

He has now submitted a “synthetical” working document to be discussed further and promised he would return later this month.

During his week-long visit, Valls had taken time to meet New Caledonia’s main stakeholders, including political, economic, education, health, and civil society leaders.

He has confirmed France’s main pillars for its assistance to New Caledonia, nine months after deadly and destructive riots broke out, leaving 14 dead, several hundred businesses destroyed, and thousands of job losses for a total estimated damage of 2.2 billion euros (NZ$4 billion).

The French aid confirmed so far mainly consisted of a loan of up to 1 billion euros (NZ$1.8 billion) as well as grants to rebuild all damaged schools and some public buildings.

Valls also announced French funding to pay unemployment benefits (which were to expire at the end of this month) were now to be extended until the end of June.

However, the main feature of his stay, widely regarded as the major achievement, was to manage to gather all political tendencies (both pro-independence and those in favour of New Caledonia remaining a part of France) around the same table.

The initial talks were first held at New Caledonia’s Congress on February 24.

Two days later, talks resumed at the French High Commission between Wednesday and Friday last week, in the form of “tripartite” discussions between pro-France, pro-independence local parties and the French State.

As some, especially the pro-independence umbrella FLNKS (Kanak and Socialist National Liberation Front), insisted that those sessions were “discussions”, not “negotiations”, there was a general feeling that all participants now seemed to recognise the virtues of the exchanges and that they had at least managed to openly and frankly confront their respective views.

Valls, who shared a feeling of relative success in view of what he described as a sense of “historic responsibility” from political stakeholders, even extended his stay by 24 hours.

Speaking at the weekend, he said he had now left all parties with a document that was now supposed to synthesise all views expressed and the main items remaining to be further discussed.

A cautiously hopeful Valls said views would continue to be exchanged, sometimes by video conference.

Taking part in the same visit last week was Eric Thiers, a special adviser to French Prime Minister François Bayrou.

Valls also stressed he would return to New Caledonia sometime later this month, maybe March 22-23, depending on how talks and remote exchanges were going to evolve.

In the meantime, the shared document would be subjected to many amendments and suggestions in order to take the shape of a fit-enough basis for a compromise acceptable by all.

The work-in-progress document details a wide range of subjects, such as self-determination, the relationship with France, the transfer of powers, who would be in charge of international relations, independence, a future system of governance (including the organisation of the three provinces), the electoral roll for local elections, the notion of citizenship (with a proposed system of “points-based” accession system), all these under the generic notion of “shared destiny”.

There was also a form of consensus on the fact that if a future text was to be submitted to popular approval by way of a referendum, it should not be based on a binary “yes” or “no” alternative, but on a comprehensive, wide-ranging “project”.

On each of those topics, the draft takes into account the different and sometimes opposing views expressed and enumerates a number of possible options and scenarios.

Based on this draft working document, the next round of talks would lead to a new agreement that is supposed to replace and offer a continuation to the ageing Nouméa Accord, signed in 1998 and install a new roadmap for New Caledonia’s future.

As part of discussions, another topic was the future of New Caledonia’s great council of chiefs, the Customary Senate, and possible changes from its until-now consultative status to a more executive role to turn New Caledonia’s legislative system from a Congress-only system to a bicameral one (Congress-Parliament and a chiefly Senate).

Struggling nickel mining industry
The very sensitive question of New Caledonia’s nickel mining industry was also discussed, as the crucial industry, a very significant pillar of the economy, is undergoing its worst crisis.

Since August 2024, one of its three factories and smelters, Koniambo (KNS) in the north of the main island has been mothballed and is still up for sale after its majority stakeholder, Anglo-Swiss Glencore, decided to withdraw after more than a decade of losses (more than 13 billion euros — NZ$24 billion).

Another nickel-producing unit, in the South, Prony, is currently engaged in negotiations with potential investment companies, one South African, one from  the United Arab Emirates and the other Indian.

New Caledonia’s historic nickel miner, Société le Nickel (SLN, a subsidiary of French giant Eramet), is still facing major hurdles to resume operations as it struggles to regain access to its mining sites.

The situation was compounded by a changing competition pattern on the world scale, New Caledonia’s production prices being too high and Indonesia now clearly emerging as a world leader, producing much cheaper first-class nickel and in greater quantities.

‘A new nickel strategy is needed’, Valls says
While political parties involved in the talks (all parties represented at the Congress) remained tight-lipped and media-elusive throughout last week, they recognised a spirit of “constructive talks” with a shared goal of “listening to each other”.

However,  the views remain radically opposed, even irreconcilable — pro-independence supporters’ most clear-cut position (notably that from the Union Calédonienne) consists of a demand for a quick, full independence, with a “Kanaky Accord” to be signed this year, to be followed by a five-year “transition” period.

On the pro-France side, one of the main bones of contention defended by the two main parties (Les Loyalistes and Rassemblement-LR) is to affirm that their determination to maintain New Caledonia as a part of France has been confirmed by three referenda (in 2018, 2020 and 2021) on self-determination.

Pro-independence parties argue, however, that the third and last referendum, in December 2021, was boycotted by the pro-independence movement and that it was not legitimate, even though it was ruled by the courts as valid.

They are also advocating for significant changes to be made in the way the three provinces are managed, a system described as “internal federalism” but decried by opponents as a form of separatism.

In the pro-France camp, the Calédonie Ensemble party holds relatively more open views.

In between are the more moderate pro-independence parties, PALIKA and UMP, which favour of a future status revolving around the notion of “independence in association with France”.

‘At least no one slammed the door’
“At least no one slammed the door and that, already, is a good thing,” said pro-France leader and French MP Nicolas Metzdorf.

“We’re still a long way away from a political compromise, but we have stopped moving further away from it,” he added, giving credit to Vall’s approach.

On his part, Valls stressed that he did not want to rush things in order to “maintain the thread” of talks, but that provincial elections were scheduled to take place no later than 30 October 2025.

“I don’t want to force things, I don’t want to break the thread . . . sometimes, we wanted to rush things, and that’s why it didn’t work,” he elaborated, in a direct reference to numerous and unsuccessful attempts by previous French governments, since 2022, to kick-start the comprehensive talks.

“Some work will be done by video conference. I will always take my responsibilities, because we have to move forward”, Valls told public broadcaster NC la 1ère.

He said France would then return with its proposals and offers.

“And we will take our responsibilities. The debate cannot last for months and months. We respect everyone, but we have to move forward. There is no deadline, but we all know that there are provincial elections.”

Those elections — initially scheduled in May 2024 and then in December 2024 — have already been postponed twice.

They are supposed to elect the members of New Caledonia’s three provinces (North, South and Loyalty Islands), which in turn makes up the territory’s Congress and the proportional makeup of the government and election of President.

All parties involved will now to consult with their respective supporters to get their go-ahead and a mandate to embark on full negotiations.

This article is republished under a community partnership agreement with RNZ.

Article by AsiaPacificReport.nz

A West Papuan advocacy group for self-determination for the colonised Melanesians has appealed to the United Kingdom government to cancel its planned reception for new Indonesian President Prabowo Subianto.

“Prabowo is a blood-stained war criminal who is complicit in genocide in East Timor and West Papua,” claimed an exiled leader of the United Liberation Movement for West Papua (ULMWP), Benny Wenda.

He said he hoped the government would stand up for human rights and a “habitable planet” by cancelling its reception for Prabowo.

Prabowo, who was inaugurated last month, is on a 12-day trip to China, the United States, Peru, Brazil, and the United Kingdom.

He is due in the UK on Monday, November 19.

The trip comes as Indonesian security forces brutally suppressed a protest against Indonesia’s new transmigration strategy in the Papuan region.

Wenda, an interim president of ULMWP, said Indonesia was sending thousands of industrial excavators to destroy 5 million hectares of Papuan forest along wiith thousands of troops to violently suppress any resistance.

“Prabowo has also restarted the transmigration settlement programme that has made us a minority in our own land. He wants to destroy West Papua,” the UK-based Wenda said in a statement.

‘Ghost of Suharto’ returns
“For West Papuans, the ghost of Suharto has returned — the New Order regime still exists, it has just changed its clothes.

“It is gravely disappointing that the UK government has signed a ‘critical minerals’ deal with Indonesia, which will likely cover West Papua’s nickel reserves in Tabi and Raja Ampat.

“The UK must understand that there can be no real ‘green deal’ with Indonesia while they are destroying the third largest rainforest on earth.”

Wenda said he was glad to see five members of the House of Lords — Lords Harries, Purvis, Gold, Lexden, and Baroness Bennett — hold the government to account on the issues of self-determination, ecocide, and a long-delayed UN fact-finding visit.

“We need this kind of scrutiny from our parliamentary supporters more than ever now,” he said.

Prabowo is due to visit Oxford Library as part of his diplomatic visit.

“Why Oxford? The answer is clearly because the peaceful Free West Papua Campaign is based here; because the Town Hall flies our national flag every December 1st; and because I have been given Freedom of the City, along with other independence leaders like Nelson Mandela,” Wenda said.

This visit was not an isolated incident, he said. A recent cultural promotion had been held in Oxford Town Centre, addressed by the Indonesian ambassador in an Oxford United scarf.

The people of West Papua have spoken.

Just today (15/11/24), rallies against Indonesia’s settler-colonial Transmigration plan were held in:

Jayapura, Nabire, Sorong, Manokwari, Yahukimo, Yalimo, Timika, Makassar. pic.twitter.com/u0ucw8RfUW

— Veronica Koman 許愛茜 (@VeronicaKoman) November 15, 2024

Takeover of Oxford United
“There was the takeover of Oxford United by Anindya Bakrie, one of Indonesia’s richest men, and Erick Thohir, an Indonesian government minister.

“This is not about business — it is a targeted campaign to undermine West Papua’s international connections. The Indonesian Embassy has sponsored the Cowley Road Carnival and attempted to ban displays of the Morning Star, our national flag.

“They have called a bomb threat in on our office and lobbied to have my Freedom of the City award revoked. Indonesia is using every dirty trick they have in order to destroy my connection with this city.”

Wenda said Indonesia was a poor country, and he blamed the fact that West Papua was its poorest province on six decades of colonialism.

“There are giant slums in Jakarta, with homeless people sleeping under bridges. So why are they pouring money into Oxford, one of the wealthiest cities in Europe?” Wenda said.

“The UK has been my home ever since I escaped an Indonesian prison in the early 2000s. My family and I have been welcomed here, and it will continue to be our home until my country is free and we can return to West Papua.”

15/11/24 Jayapura, West Papua

Another angle showing that the rally against Transmigration was peaceful, but the police forcibly dispersed it.

This violates domestic and international laws. pic.twitter.com/Tm5f4d0VrU

— Veronica Koman 許愛茜 (@VeronicaKoman) November 15, 2024

Article by AsiaPacificReport.nz

A South African company is reported to be the most probable bidder for shares in New Caledonia’s Prony Resources.

As part of an already advanced takeover of the ailing southern plant of Prony Resources, the most probable bidder is reported to be South African group Sibaneye-Stillwater, local new media report.

Just like the other two major mining plants and smelters in New Caledonia, Prony Resources is facing acute hardships due to the emergence of Indonesia as a major player on the world market, compounded with New Caledonia’s violent unrest that broke out in May.

Prony Resources has been trying to find a possible company to take over the shares held by Swiss trader Trafigura (19 percent).

The process was recently described as very favourable to a “seriously interested” buyer.

Citing reliable sources, daily newspaper Les Nouvelles Calédoniennes yesterday named South Africa’s Sibanye-Stillwater.

The Johannesburg-based entity is a significant player on the minerals world market (including nickel, platinum and palladium) and owns, amongst other assets, a hydro-metallurgic processing plant in Sandouville (near Le Havre, western France) with a production capacity of 12,000 tonnes per year of high-grade nickel which it bought in February 2022 from French mining giant Eramet for 85 million euros (NZ$153 million).

The ultimate goal would be, for the South African player, to become a leader on the production market for innovative electric vehicles batteries, especially on the European market.

Southern Province President Sonia Backès had already hinted last week that one buyer had now been found and that one bidder had successfully reached advanced stages in the due diligence process.

If the deal eventuated, the new entity would take over the shares held by Swiss trader Trafigura (19 percent) and another block of shares held by the Southern Province to reach a total of 74 percent participation in Prony Resources stock, as part of a major restructuration of the company’s capital.

Prony Resources, in full operation mode, employs about 1300 staff.

Another 1700 are employed indirectly through sub-contractors.

It has paused its production to retain only up to 300 staff, in safety and maintenance mode, partly due to New Caledonia’s current unrest.

New Caledonian consortium’s surprise bid for mothballed Northern plant
Meanwhile, a local consortium of New Caledonian investors is reported to have made an 11-hour offer to take over and restart activity for the now mothballed Koniambo (KNS) nickel plant.

The plant’s furnaces were placed in “cold care and maintenance” mode at the end of August, six months after major shareholder Anglo-Swiss Glencore announced it wanted to withdraw and sell the 49 percent shares it has in the project.

This caused close to 1200 job losses and further 600 among sub-contractors.

Other bidders still interested
KNS claimed at least three foreign investors were still interested at this stage, but none of these have so far materialised.

Talks were however reported to continue behind the scenes, with interested parties even ready to travel and visit on-site, KNS Vice-President and spokesman Alexandre Rousseau told Reuters news agency earlier this month.

‘Okelani Group One’
But a so-called “Okelani Group One” (OGO), made up of three local partners, said their offer could revive the project with a different business model.

They say they have made an offer to KNS’s majority shareholder SMSP (Société Minière du Sud Pacifique, New Caledonia’s Northern province financial arm).

OGO president Florent Tavernier told public broadcaster NC la 1ère much depended on what Glencore intended to do with the staggering debt of some US$13.7 billion which KNS had accumulated over the past 10 years.

Another OGO partner, Gilles Hernandez, explained: “We would be targeting a niche market of very high quality nickel used in aeronautics and edge-cutting technologies, especially in Europe, where nickel is now classified as ‘strategic metal’.”

Although KNS was designed to produce 60,000 tonnes of nickel a year, that target was never reached.

OGO said it would only aim for 15,000 tonnes per year and would only re-employ 400 of the 1200 laid-off staff.

New Caledonia’s third nickel plant, owned by historic Société Le Nickel (SLN, a subsidiary of French mining giant Eramet), which is also facing major hardships for the same reasons, is said to currently operate at minimal capacity.

This article is republished under a community partnership agreement with RNZ.

Article by AsiaPacificReport.nz

Fresh clashes in New Caledonia have erupted in the suburbs of Nouméa between security forces and pro-independence protesters who oppose a nickel pact offering French assistance to salvage the industry.

The clashes, involving firearms, teargas and stone-throwing, went on for most of yesterday, blocking access roads to the capital Nouméa, as well as the nearby townships of Saint-Louis and Mont-Dore.

Traffic on the Route Provinciale 1 (RP1) was opened and closed several times, including when a squadron of French gendarmes intervened to secure the area by firing long-range teargas.

The day began with tyres being burnt on the road and then degenerated into violence from some balaclava-clad members of the protest group, who started throwing stones and sometimes using firearms and Molotov cocktails, authorities alleged.

Security forces said one of their motorbike officers, a woman, was assaulted and her vehicle was stolen.

Two of the protesters were reported to have been arrested for throwing stones.

Banners were deployed, some reading “Kanaky not for sale”, others demanding that New Caledonia’s President Louis Mapou (pro-independence) resign.

Northern mining sites also targeted
Other incidents took place in the northern town of La Foa, in the small mining village of Fonwhary, near a nickel extraction site, where Société Le Nickel trucks were not allowed to use the road.

Mont-Dore Mayor Eddy Lecourieux told local Radio Rythme Bleu they had the right to demonstrate, “but they could have done that peacefully”.

“Instead, there’s always someone who starts throwing stones.”

At dusk, the Saint-Louis and Mont-Dore areas were described as under control, but security forces, including armoured vehicles, were kept in place.

“On top of that, there are more marches scheduled for this weekend,” Lecourieux said.

Pro-independence protesters oppose current plans to have a French Constitutional amendment endorsed by France’s two houses of Parliament.

As a first step of this Parliamentary process, last week, the Senate endorsed the text, but with some amendments.

Opposing marches
Pro-France movements also want to march on the same day in support of the amendment.

If endorsed, it would allow French citizens to vote at New Caledonia’s local elections, provided they have been residing there for an uninterrupted 10 years.

Pro-independent parties, however, strongly oppose the project, saying this would be tantamount to making indigenous Kanaks a minority at local polls, and would open the door to a “recolonisation” of New Caledonia through demographics.

A similar high-risk configuration of two marches took place on March 28 in downtown Nouméa, with more than 500 French security forces deployed to keep both groups away from each other.

French authorities are understood to be holding meeting after meeting to fine-tune the security setup ahead of the weekend.

Florent Perrin, the president of Mont-Dore’s “Citizens’ Association”, told media local residents were being “taken hostage” and the unrest “must cease”.

He urged political authorities to “make decisions on all political and economic issues” New Caledonia currently faces.

Perrin called on the local population to remain calm, but invited them to “individually lodge complaints” based on “breach of freedom of circulation”.

“On our side too, tensions are beginning to run high, so we have to remain calm and not respond to those acts of provocation,” he said.

In return, France is asking that New Caledonia’s whole nickel industry should undergo a far-reaching slate of reforms in order to make nickel less expensive and therefore more attractive on the world market.

The pact aims to salvage New Caledonia’s embattled nickel industry and its three factories — one in the north of the main island, Koniambo (KNS), and two in the south, Société le Nickel (SLN), a subsidiary of French giant Eramet, and Prony Resources.

KNS’ nickel-processing operations were put in “sleep”, non-productive mode in February after its major financier, Anglo-Swiss Glencore, said it could no longer sustain losses totalling 14 billion euros (NZ$25 billion) over the past 10 years, and that it was now seeking an entity to buy its 49 percent shares.

The other two companies, SLN and Prony, are also facing huge debts and a severe risk of bankruptcy due to the new nickel conditions on the world market, now dominated by new players such as Indonesia, which produces a much cheaper and abundant metal.

New ultimatum from Northern Province
On Tuesday, Northern province President Paul Néaoutyine added further pressure by threatening to suspend all permits for mining activities in his province’s nine sites, where southern nickel companies are also extracting.

In a release, Néaoutyine made references to payment guarantees deadlines on April 10 that had not been honoured by SLN.

It is understood SLN’s owner, Eramet, was scheduled to meet in a general meeting in Paris later on Tuesday.

The French pact — France is also a stakeholder in Eramet — would also help SLN provide longer-term guarantees.

Southern province President and Les Loyalists (pro-France) party leader Sonia Backès alleged on Tuesday that Néaoutyine wants to do everything he can to shut down SLN and block the nickel pact

“Now things are very clear — before it was all undercover; now it’s out in the open,” she said.

“Now we will do everything to maintain SLN, because this means 3000 jobs at stake.”

Congress dragging its feet
Yesterday, New Caledonia’s Congress was holding a meeting behind closed doors to again discuss the French pact.

The Congress decided to postpone its decision and, instead, suggested setting up a “special committee” to further examine the pact and the condition it is tied to, and more generally, “the nickel industry’s current challenges”.

Opponents to the agreement mainly argue that it would pose a risk of “loss of sovereignty” for New Caledonia on its precious metal resource.

They also consider the nickel industry stake-holding companies are not committing enough and that, instead, New Caledonia’s government is asked to raise up to US$80 million (NZ$132 million), mainly by way of new taxes imposed on taxpayers.

Last week, a group of Congressmen, mostly from pro-independence Union Calédonienne, one of the four components of the pro-independence FLNKS, with the backing of one pro-France party, Avenir Ensemble, had a motion adopted to postpone one more time the signing of the pact.

President Mapou defies pro-independence MPs
President Louis Mapou, himself from the pro-independence side, urged the supporters of the motion to “let [him] sign” last week during a Congress public sitting.

“Let’s do it . . .  Authorise us to go at it . . .  What are you afraid of?” he said.

“Are we afraid of our militants?”

Mapou said if there was no swift Congress response and support to sign the pact, for which he himself had asked the Congress for endorsement, he would “take [his] responsibility” and go ahead anyway.

“I will honour the commitment I made to the French State.”

He said if they wanted to to sanction him with a motion of no confidence to go ahead. He was not afraid of this.

Mapou also told the pro-independence side in Congress that he believed they khad ept postponing any Congress decision “because you want to engage in negotiations as part of [New Caledonia’s] political agreements”.

Last week, Backès, who expressed open support for Mapou’s “courage”, told Radio Rythme Bleu she and Mapou had both received death threats.

This article is republished under a community partnership agreement with RNZ.

Article by AsiaPacificReport.nz

The signing of a “nickel pact” to salvage New Caledonia’s embattled industry has not been signed by the end of March, as initially announced by French Economy Minister Bruno Le Maire.

Le Maire had hinted at the date of March 25 last week, but New Caledonia’s territorial government President Louis Mapou wants to have his Congress endorse the pact before he signs anything.

The Congress is scheduled to put the French pact (worth hundreds of millions of euro) to the debate this Wednesday.

The pact is supposed to bail out New Caledonia’s nickel industry players from a grave crisis, caused by the current state of the world nickel prices and the market dominance of Indonesia which produces much cheaper nickel in large quantities.

The proposed aid agreement, however, has strings attached: in return, New Caledonia’s nickel industry must undertake a far-reaching reform plan to increase its attraction and decrease its production costs.

This article is republished under a community partnership agreement with RNZ.

Article by AsiaPacificReport.nz

A former New Caledonia-based High Commissioner, Patrice Faure, has been appointed Chief-of-Staff of French President Emmanuel Macron.

Faure is described as an expert on French overseas territories, particularly New Caledonia.

The 56-year-old prefect was France’s representative (High Commissioner) in New Caledonia between 2021 and 2023, a period marked by the covid pandemic, but also the last two of three referendums held over the French Pacific territory’s possible independence.

He was also tasked to organise the first attempts to bring together pro-France and pro-independence political parties to talk and make suggestions on New Caledonia’s political and institutional future.

Faure was replaced in Nouméa by Louis Le Franc in early 2023.

French daily Le Monde suggests that Faure’s appointment would enable French President Macron to have a close adviser on New Caledonia’s developments in the coming months.

While French Home Affairs and Overseas minister Gérald Darmanin has travelled half a dozen times to New Caledonia throughout 2023, France’s efforts to foster bipartisan and simultaneous talks have not yet come to fruition.

UC refuses to join talks
One political party wjich is a member of the pro-independence umbrella (FLNKS) — the Union Calédonienne (UC) — is still refusing to join those talks.

French PM Elisabeth Borne gave New Caledonia’s political parties until 1 July 2024 to come up with collective suggestions on the sensitive subject.

Borne also announced over Christmas that her government would table a Constitutional amendment to “unfreeze” New Caledonia’s electoral roll and enable French citizen residing there for over 10 years to vote in local elections.

While Darmanin is scheduled to come back to New Caledonia early in the year, Finance Minister Bruno Lemaire will also visit again to supervise a far-reaching reform plan to solve New Caledonia’s “critical” situation in the nickel mining industry.

In February 2024, Justice Minister Eric Dupond-Moretti will also travel there to provide more details about the construction of a new French-funded prison at an estimated cost of €498 million (NZ$873 million).

This article is republished under a community partnership agreement with RNZ.

Article by AsiaPacificReport.nz

A coalition government in New Caledonia has collapsed after indigenous pro-independence politicians resigned, citing persistent economic issues and unrest over the sale of nickel assets.

The South Pacific archipelago has been gripped by riots over the sale process of Brazilian mining giant Vale’s local nickel business, with protesters saying a locally-led offer had been unfairly overlooked.

New Caledonia, with a population of about 290,000, is also grappling with the question of decolonisation.

The crisis comes as New Caledonia is facing widespread flooding and damage from Tropical Cyclone Lucas.

The island chain enjoys a large degree of autonomy but depends heavily on France for matters such as defence and education.

Referendums in 2018 and 2020 both narrowly rejected independence. A third referendum due by the end of next year should finally settle the issue, under the terms of a 1998 Noumea accord with France.

Five pro-independence politicians – three from the Union Caledonian (UC) and two from the National Union for Independence (UNI) – both members of the pro-independent Kanak and Socialist National Liberation Front (FLNKS), in the 11-member executive have resigned.

Upheaval marks end of Santa coalition
The upheaval marks the end of President Thierry Santa’s multiparty government after 18 months in power. Congress must elect a new government within 15 days.

#DirectLNC #LncPays Les indépendantistes de Nouvelle-Calédonie font chuter le gouvernement https://t.co/EhEUsMybEf

— Les Nouvelles calédoniennes (@lncnc) February 2, 2021

The Santa-led anti-independence coalition, L’avenir en confiance, claimed in a statement that the pro-independence legislators were causing a political crisis in the middle of a pandemic and amid economic and social tensions.

The pro-independence members’ resignation letter said a “crisis of confidence” had set in and that the government was not functioning properly at an important time when preparations were needed to be made for the next independence vote.

The letter also said the nickel asset sale favoured the interests of multinationals over locals.

New Caledonia is the world’s fourth-largest nickel producer, behind Indonesia, the Philippines and Russia.

Demand for nickel, mainly used in making stainless steel, is expected to grow rapidly as a raw material in electric vehicle batteries.

Vale wants to sell its nickel business in New Caledonia to a consortium of buyers including Swiss commodities trader Trafigura.

Indigenous Kanak leaders had supported an earlier bid designed to keep majority ownership under the control of the island territory.

This article is republished under a community partnership agreement with RNZ.

Article by AsiaPacificReport.nz

Efforts by Brazilian miner Vale SA to extract itself from one of the world’s largest nickel and cobalt operations are creating deeping tensions and confusion in the French Pacific territory of New Caledonia.

On Wednesday night Vale announced a vague deal, without disclosing full financials, but by Thursday there was uncertainty as Paris officials entered a political maze around it all.

Violence broke out this week in the capital Noumea with indigenous pro-independence groups trying to take control of the mining as small bands of white settlers, some armed, supported Vale’s exit plans.

It comes soon after New Caledonia, population 286,000, held a second referendum on independence in October, narrowly voting to retain French control.

A third referendum in 2022 may yet be held.

Indigenous “Kanaks” account for 39 percent of the population.

New Caledonia has around a quarter of the world’s known nickel reserves.

Conrontation over nickel
The current confrontation involves the Goro Nickel Project, 60 km east of Noumea which commenced production in 2010 planning to produce 60,000 tonnes a year of nickel and up to 5000 tonnes of cobalt.

It has 55 million tonnes of estimated measured and indicated mineral reserves.

Vale obtained the rights as part of a 2007 US$19 billion takeover of Canadian company Inco. But it ran several years behind creating the project, worth over US$6 billion.

Start up decisions left an operation only producing around a third of its promised annual capacity. Using a difficult technology to convert ore to nickel oxides, Vale has been unable to produce preferential battery material nickel sulfate.

Nickel production at the Goro mine reached its peak 37,400 tonnes in 2017. The mine was expected to produce 31,000 tonnes this year in 2020.

The Goro project, which includes open cast mining, refining and a port, has been 95 percent owned by Vale Nouvelle-Calédonie with the balance held by the local government.

Vale’s plant is the second-largest employer in the Southern Province, with some 3500 employees and contractors.

Vale trying to get out
Vale has been attempting to get out, to the extent of simply closing the operation and walking away.

Earlier this year Australian-based zinc producer New Century said it was seeking a deal to buy but backed out after failing to raise enough cash.

Indigenous groups sought to promote a bid from Sofinor, the financial arm of New Caledonia’s Kanak-run and majority population Northern Province and its partner Korea Zinc.

While Vale had rejected the offer, it stayed political live until last week when, as violence escalated, Korea Zinc pulled out.

University of New Caledonia law professor Dr Mathias Chauchat said the situation was a mess with five areas of concern. These included a difference in treatment between how the Prony and Sofinor bids were treated and possible conflicts of interest among directors of Vale New Caledonia.

There is also “the ecological risk of a residue dam, like in Brazil”. There was also concern over the move away from exporting finished goods and the question of whether in changed New Caledonia there was to be public sector development, or not.

In early December Vale said they would only negotiate with a new group, Prony Resources, named after the local port. Prony is led by Vale’s current New Caledonia management and employees, supported by New Caledonian and French authorities.

Singaporean group
Twenty five percent of Prony’s shares are held by Trafigura Group, a Singaporean multinational commodity trading company.

On Thursday Vale said it had a “binding put option” to formalise the sale to Prony Resources. It said the new structure offered “significant domestic participation and that takes into account the aims of social and environmental responsibility….”

It would continue long standing commitments to maintain benefits for the indigenous people of New Caledonia’s Southern Province.

“All parties to this negotiation have invested a significant amount of time and effort to reach a solution for the sustainable future of (Vale),” said Mark Travers, Vale’s executive director of Base Metals.

“Vale and everyone involved in the divestment process – including the South Province of New Caledonia, the French State and (Vale) employees and management – can be proud of the fact that those efforts have yielded such a positive result.”

As a result of the deal Vale said they expect it completed by the first quarter of next year and that “a reserve of US$500 million will be reflected on Vale’s consolidated financial statements.”

The deal remains subject to the approval of New Caledonian authorities and the French state.

Noumea at a standstill
But as the maneuvering continued this month Noumea has come to much of a standstill in the wake of demonstrations and roadblocks. Mines, shops, the port and several major roads to Goro have been blocked.

The main independence group, the Kanak Socialist National Liberation Front (Front de Libération Nationale Kanake et Socialiste; FLNKS) say their fight over Goro “is a fight against multinationals who try to loot the wealth of all New Caledonians and pollute our country”.

They want the indigenous to be majority owners.

FLNKS, which controls Northern Province, has especially objected to Trafigura, saying it amounts to “plundering of the country’s resources by multinationals”.

Europe-based public affairs consultant Sebastien Goulard, a specialist on European Union-China relations and New Caledonia said the local people did not want Trafigura, because of questions over its role in possible environmental damage.

He said the Vale-favoured deal gives more power to the French loyalists in the Southern Province, meaning the FLNKS would not be able to control the southern mine and the jobs that the mine provides.

“It is not only about economics,” he said, “and that’s why it is so difficult to conduct business in New Caledonia.”

Industrial strategy
Another point was the industrial strategy presented by Trafigura.

“Trafigura would continue the recent strategy adopted by Vale: that is to say the production of NHC (nickel hydroxyde cake), and nickel saprolite type ore to be exported to China (and Finland, if Trafigura’s option is chosen).”

Goulard asked whether it was really possible to refine nickel in New Caledonia in a competitive way.

“The pro-independence supporters prefer to keep control over the island’s main economic sectors,” he said.

“But is it really the best choice when you want to be independent and you will need bigger foreign investment in the coming years? The current crisis gives a terrible image of New Caledonia to possible foreign investors.”

Michael Field, who writes for Nikkei Asia, has provided this article for Asia Pacific Report.

Article by AsiaPacificReport.nz

COMMENTARY: By Scott Waide in Lae

Just into the fourth month of 2019, and resource projects in Papua New Guinea have come under scrutiny.

Early last month, senior ministers of government, including Petroleum Minister Fabian Pok, traveled to Komo in Hela for meetings with landowners of the gas project.

After 15 years, there is some progress. Or at least that’s the positive spin to it.

READ MORE: O’Neill loses in high stakes battle for control of US$1.4b PNGSDP

There appears to be some indication that royalties locked away due to legal battles and tangled by bureaucratic red tape were going to be paid – but only after landowner identification processes.

Finance Minister James Marape told the media three months ago, that K300 million (NZ$132 million) is parked at the Central Bank ready to be released. But landowners or people claiming to be landowners had to follow a process of “landowner identification” in order to be paid the money.

There is some hope of an end to disputes. However, the final settlement is still a long way off. That’s the reality. Many of the elders died waiting for the royalty payments they were promised.

Since becoming a new province, there is still a lot that needs to be ironed out. The Hela provincial government still has to work its way through layers of bureaucratic processes that continue to favour the Southern Highlands in terms of royalty payments from the gas project.

It’s all that and a lot more.

Background to complexities
Understanding the background to the complexities of the resource project in Hela means going back some 20 years when oil extraction ended and the promise of Papua New Guinea becoming the Saudi Arabia and Dubai of the Pacific faded as the crude oil taps shut off.

It is against that backdrop that the neighbouring Enga province is now looking at the Porgera mine’s renegotiation through a wardens’ hearing. This is a process that is reopened after the end of a mining lease.

Landowners and the Enga provincial government are looking at a bigger slice of revenues and benefits.

What did they get over the last 30 years? That’s a point of contention for pro-mining and anti-mining proponents.

What is visible to the international community is the campaigns against alleged atrocities committed against local people in Porgera and the desperate push by locals to get what little crumbs they can from a mine that has existed for 30 years on their land.

For the first time in more than three decades, it appears the national government is speaking a different language: One that calls for greater benefits into government coffers and landowner pockets.

This rhetoric has come after 30 years of gold extraction, 500 shipments of liquefied natural gas and billions of dollars worth of round log exports.

Production-based tax
In Lae, during the opening of the Central Bank’s Currency Processing Facility, Deputy Prime Minister Charles Abel talked about a production-based tax. Instead of a profit-based tax for resource projects which will be signed from 2019 onwards.

The general thinking from the national government is that a profits based tax can be deceptive leaving the government with very little to collect if a mining company declares losses or breaks even.

While Porgera discusses mine benefits, a similar process is happening in Madang. Triggered by an agreement between the Chinese and the PNG Governments, Ramu Nickel’s expansion is in discussions ongoing between the government and the developer.

The processes are long and drawn out. The risk is that without proper representation, landowners could be left with another raw deal for several more decades before another opportunity for renegotiation presents itself.

Scott Waide’s blog columns are frequently published by Asia Pacific Report with permission. He is also EMTV deputy news editor based in Lae.

Article by AsiaPacificReport.nz

By Moses Ompusunggu in Jakarta

Indonesia’s Jakarta Corruption Court has sentenced suspended Southeast Sulawesi governor Nur Alam to 12 years in prison in a case linked to several mining licences that led to environmental destruction in Buton, Southeast Sulawesi.

The court, which also ordered Nur to pay a fine of Rp 1 billion (US$72,700) and restitution of Rp 2.7 billion last Wednesday, found the National Mandate Party (PAN) politician guilty of misusing his authority to grant mining licences between 2009 and 2014 to nickel miner PT Anugerah Harisma Barakah (AHB) in which he owns a 2 percent stake under the name of his aide.

Corruption Eradication Commission (KPK) prosecutors called for a sentence of 18 years.

Presiding judge Diah Siti Basariah said there had been mitigating factors behind the court’s verdict, such as Nur’s many awards he received while serving as governor.

The state losses, Rp 1.5 trillion, were also lower than the Rp 4.3 trillion the prosecutors argued in their indictment, which included Rp 2.7 trillion in environmental destruction caused by the miner.

Environmental destruction
The panel of judges said the environmental destruction was not Nur’s responsibility, but the company’s.

-Partners-

The company had tried to rehabilitate the area, the judges said.

The court also stripped him of his political rights for five years after he serves his time in prison, which was sought by KPK prosecutors.

Nur denied any wrongdoing and said he would “waste no time” to appeal against the verdict.

“I hope the respected judge can consider that I deserve a sense of justice because I have served as a state apparatus and given my best while on duty,” he added.

Moses Ompusunggu is a Jakarta Post journalist.

Article by AsiaPacificReport.nz

By Jeremaiah M. Opiniano in Manila

The Philippines is among the world’s top sources of metallic deposits like nickel. But in this Southeast Asian mining haven, love may have been lost between the Philippine government and the mining industry.

The country’s Department of Environment and Natural Resources (DENR) has ordered the closure of 23 mines and the companies operating them, plus suspending five others. The firms’ closures and suspensions were recommended by experts who conducted mining audits for the DENR between July and August 2016.

The audits were done in response to reports of these mining firms’ compliance or non-compliance with prevailing regulations on responsible mining and maintaining of environmental standards.

Philippines’ Environment Secretary Regina Lopez is in hot water from the mining industry given her closure and suspension orders, all announced in early February.

Policy and legal battles related to the months-old government of President Rodrigo Duterte have triggered a closer watch on the mining issue.

Mining sector protests
The controversy erupted after February 2 with the announcement of the cancellation and suspension orders by Lopez. Six days later, Lopez had signed the cancellation and suspension orders of the 28 affected companies.

The DENR also released results of the mining audit online explaining why the firms’ mining operations were ordered cancelled or suspended.

Protests followed from the mining sector, especially the industry association Chamber of Mines of the Philippines (COMP). The group said an estimated PhP70 billion (NZ$1.9 billion) in gross production value and some P20 billion (NZ$556 million) in taxes would be lost because of these closure orders, and some 67,000 workers may be displaced.

The COMP said the orders were released “without due process,” but Lopez said  on February 10 that DENR “meticulously observed due process.”

Lopez was referring to the work of the multi-sectoral audit teams that looked at the mining projects in the identified areas. Experts from the central and regional offices of the DENR; from the DENR attached agencies like the Mines and Geosciences Bureau (MGB), Environmental Management Bureau (EMB), the Biodiversity Management Bureau (BMB and the Ecosystems Research and Development Bureau (ERDB); experts from the Departments of Health and Agriculture; and representatives from various civil society organisations conducted the audits.

The multi-sectoral audit teams, Lopez explained, used criteria on the requirements of the different mining and environmental laws of the country. The teams also did cross-auditing, with auditors who reviewed the projects come from another Philippine geographical region. Lopez added the teams also staged entry and exit conferences with stakeholders, including the mining companies.

Seven days were given to the companies to respond to the technical results of the audits and the “show cause” orders. Afterwards, and spanning five months, a technical review committee conducted further review on the companies’ replies to the audit teams’ reviews

Bombardment
After the February 2 announcement from Secretary Lopez, COMP sought the help of the economic managers of Duterte’s cabinet, including Finance Secretary Carlos Dominguez who co-chairs with Lopez an inter-agency Mining Industry Coordinating Council (MICC).

On February 9, Secretaries Lopez and Dominguez — as MICC co-chairs— decided to form a multi-stakeholder committee that will review and advise DENR on Philippine mining operations, to include the recent decisions handed out to the 23 closed and five suspended mining firms.

The mining companies had operations in identified mining hotspots of the country, such as Benguet province (north of Manila, in Luzon island), Zambales province (in the western part of Luzon island), Surigao del Sur (in eastern Mindanao island), Dinagat Island (also in eastern Mindanao), and Eastern Samar (in eastern Visayas region).

Zambales province saw four mining companies —BenguetCorp Nickel Mines, Inc., Eramen Minerals, Inc., LNL Archipelago Minerals, and Zambales Diversified Metals Corp — ordered closed due to alleged illegal logging activities, and for conducting mining operation near a river that had led to siltation in the municipality of Sta. Cruz. Nickel is said to be being extracted there close to a watershed.

Seven mining firms operating in Dinagat Islands were also ordered closed for a build-up of silt on coastal waters: AAM Philippines Natural Resources Exploration, Krominco, Inc., SinoStell Philippines H.Y. Mining Corp., Wellex Mining Corp., Libjo Mining Corp., and Oriental Vision Mining Corp.

In Surigao del Sur province, a further seven mining firms were ordered closed, also for silt in coastal waters and for mining in watersheds: ADNAMA Mining Resources Corp., Claver Mineral Development Corp., Platinum Development Corp., CTP Construction and Mining Corp., Carrascal Nickel Corp., Marcventures Mining and Development Corp. and Hinatuan Mining Corp.

Companies Mt. Sinai Exploration Mining and Development, EMIR Mineral Resources and Techlron Mineral Resources, with operations located in Eastern Samar, were also ordered closed not only because of the siltation of coastal waters, but because of the destruction of a functional watershed.

Mining audits
Apart from the 23 firms whose operations were ordered cancelled and closed by DENR, five other firms were given suspension orders. These are Berong Nickel Corp., OceanaGold Phils., Lepanto Consolidated Mining Corp., Citinickel Mines and Development Corp. and Strong Built Mining Development Corp.

DENR conducts mining audits on a regular basis. Some of the firms whose licences were cancelled by Lopez were suspended in previous years and were asked to respond to findings of mining audits.

Some of the firms were also listed in the Philippine stock market, as a few others are joint ventures by a Philippine and a foreign company. For example, Zambales Diversified Metals Corp. is a joint venture between Filipino-run D.M. Consunji Inc. (DMCI) Mining Corp. and the Australia-headquartered Rusina Mining Corp.

Another closed firm, Oriental Synergy Mining Corp., was established by Qishu Mining Corp., a subsidiary of Qishu Enterprises with headquarters in Fujian, China.

Suspended company OceanaGold Philippines, for its part, is a subsidiary of OceanGold Corp., a mid-tier multinational gold producer with assets found in the Philippines, United States and New Zealand.

Other mining companies were also sued by local residents through the writ of kalikasan (nature), a legal remedy provided by the country’s constitution for anybody to sue those who allegedly violate environmental laws and cause environmental havoc.

Lopez alleged last Thursday that some mining firms had links to local politicians, allowing the industry to flourish.

High stakes
The Philippines houses the world’s leading supply of nickel, as it was estimated by the MGB that some PhP54.9 billion (NZ$1.53 billion) of nickel products were produced in 2015.

Nickel prices at the London Metal Exchange’s LMEX Index actually rose to a 16-month high last November 2016. But the stainless steel alloy’s performance at the LMEX dropped again since January, and the price of nickel rose to over-US$10,400 per tonne last Feb. 3 given Lopez’s closure order.

There are 40 metallic mines (including 27 nickel mines) and 62 non-metallic mines in the Philippines, not to mention five processing plants, 16 cement plants, and 2397 small quarries and sand and gravel operations. The Philippines’ mining operations are governed by the 1995 Philippine Mining Act, with some 9 million ha. of land identified to have “high mineral potential” says the MGB.

MGB data shows that the Philippines earned some US$2.8 billion (NZ$3.9 billion) in exports of minerals to Japan, Australia, Canada and China. The Philippines’ minerals industry is currently employing an estimated 236,000 workers, with a job in the mining sector said to be providing four indirect jobs. Mining companies had also paid some PhP25.78 million (NZ$717.2 million) in taxes in 2015.

But a report by the country’s National Economic and Development Authority (NEDA) showed that the mining and quarrying industry contributed only less than a percent — 0.7 percent— of the country’s gross domestic product during the period 2000 to 2015. The sector also contributed 5.6 percent of total exports in the same 15-year period, as the mining sector also generated an average of 236,400 jobs from 2011 to 2015.

The Philippines is said to have as many untapped mineral deposits, according to industry experts.

COMP said in a strongly-worded February 7 statement that Lopez “has trained her guns on the legitimate (mining) operations, while turning a blind eye to un-permitted, undocumented, non-tax paying and non-compliant mining operations who are the real violators of the environment.”

‘Pose a danger’
Lopez’s closure and suspension orders, COMP said, “pose a danger to other industries” like logistics, processing companies, manpower and transportation service providers and even the education and health sectors.

“The country needs minerals and environmental policies to be handled with technical competence and sensitivity to the complexities of the issues,” COMP wrote. “We respectfully appeal to… President Duterte to thoroughly review the actions of (Lopez)… and their serious repercussions as a whole as they are without basis and legality.”

The environment secretary, a member of the Lopez family that runs a gamut of Philippine companies found in the media, power generation and distribution and energy sectors, however claimed to have the support of President Duterte.

She also wanted to prove a “green economy” model that, Lopez claims, “can provide more jobs than destructive mining.”

“My issue is not about mining,” Lopez said February 5. “My issue is about social justice.”

The closed and suspended firms have 15 days, possibly before February ends, to respond to the DENR’s cancellation and suspension orders.

Assistant Professor Jeremaiah Opiniano is coordinator of the undergraduate and graduate journalism degree programmes of the University of Santo Tomas (UST) in Manila, Philippines.