- New Caledonia
After 2018, which saw the first self-determination ballot on 4 November, 2019 was a year of gradual return to business as usual, more or less. The major highlights of the year were the cascading renewal of all congressional, provincial, and government institutions as a result of the provincial elections in May and economic and budgetary problems, which had accumulated after years of excessive government spending in preparation for the first self-determination vote. The mining sector was also extremely fraught with problems.
The year began and ended with the mining sector. The nickel industry has changed dramatically in recent years, which has left the Société le Nickel’s (sln) historic Doniambo plant in Nouméa in bad shape. A low-cost industry has developed, and 50 percent of the world’s nickel is produced at a price of us$4 per pound, while sln produced it at us$6.43, with an average nickel price over the last three years of only us$5. At the current rate, the €200 million loan granted by the French government in April 2016 is likely to be depleted by the end of 2019 (€1 million = about us$1.2 million). The first urgent solution was to allow the export of lower grade nickel ore (1.8 percent), which sln cannot use, and thus optimize the exploitation of its mines. In April the Government of New Caledonia gave the green light to export up to four million tons of low-grade nickel ore per year for a period of ten years. This is a first blow for the “nickel doctrine,” which favors local industrial transformation.
A long-term solution is to significantly lower the cost of energy by building a modern power plant; curiously, it is the country and not sln itself that will build it (lnc 2019f). On 24 October 2016, sas Nouvelle-Calédonie Énergie (nce) was created, and since July 2018 it has been owned by the Caledonian Energy Agency (50 percent), Enercal (40 percent) and sln (10 percent). French National Assembly member Philippe Gomès (Calédonie Ensemble, or Caledonia Together) has been nce’s president since its creation. However, there was a real risk of incompatibility with his political mandate, nce being intended to contract loans guaranteed by the French state and to receive funds from New Caledonia. This risk became reality in November 2018, with the Constitutional Council of France ruling that there was an obvious incompatibility (Constitutional Council of France 2018). Gomès had to resign and was indicted on 4 April 2019 for having an illegal interest in the company (Radio Rythme Bleu 2019). Despite this, he maintained that he had no personal interest in nce and that he was immensely proud [End Page 570] to have acted to get the power plant project off the ground.
By that time, the electoral campaign was already underway. The anti-independence (self-identifying as “loyalist”) party Avenir en Confiance (Future with Confidence), led by Sonia Backès, harshly attacked the pro-independence parties by accusing them “of creating the conditions for sln’s bankruptcy, with the aim of taking control of its mining lands, with the result of the destruction of hundreds of jobs and economic and social consequences that would be catastrophic for the Southern Province and cafat [the social security fund]” (NC Presse 2019b). sln was having problems, but dark clouds also continued to hang over the Southern Caledonian Vale plant. The much-feared announcement came on 3 December 2019 (lnc 2019l): the multinational company intended to sell 95 percent of its share in the hydrometallurgical complex, the remaining 5 percent belonging to the Société de Participation Minière du Sud Calédonien (South Caledonian Mining Holding Company), a holding company run by the three New Caledonian provinces. Vale announced us$1.6 billion in asset impairment, which halved the value of the plant (Reuters 2019). This company, which was already struggling after the collapse of one of its dams in Brazil, has invested massive amounts of money in a plant that has not yet proved to be competitive. Not only were production targets not met, but the...