The historical pillar of the Caledonian economy is seriously shaking. This is indicated by the particularly bleak conclusions of the report on “the future of the nickel industry in New Caledonia”carried out by the General Inspectorate of Finance (IGF) and the General Council for the Economy, at the request of the Prime Minister, Elisabeth Borne, in November 2022.
Unsurprisingly, the report states that, “without further intervention by private actors and public authorities, and despite recent and massive support, the closure of certain sites seems to be inevitable today”. The rapporteurs recall that the three metallurgists, Le Nickel (SLN), a subsidiary of Eramet; Koniambo Nickel SAS (KNS), in which the North Province is a shareholder alongside Glencore; and Prony Resources (PR), majority owned by the South Province, present “negative results for more than ten years”.
On several occasions, the Court of Auditors has alerted the State to the cost of this support and its ineffectiveness. Just for tax exemption, the financial jurisdiction estimated during its last inspection in 2020 that the sector cost around 45 million euros per year. On a visit in March, the Minister of the Interior, Gérald Darmanin, recalled that in six years, the State has supported the sector to the tune of two billion euros, adding that it “will no longer give money to factories in New Caledonia as long as there is no well-thought-out industrial project”.
Energy, “the mother of battles”
It is precisely the purpose of the report to shed light on the possibilities for a profitable future for the sector. A future that is more of a puzzle as the difficulties are numerous, and energy is the first of them. The recent surge in the price of fossil fuels, and in particular coal, predominant in the New Caledonian energy mix, has dealt a severe blow to the sector. To restore industrial competitiveness, the rapporteurs propose decarbonising energy production by converting the two coal-fired power stations to liquefied natural gas (LNG), while developing renewable energies.
“She is the mother of battles”insisted Jérôme Fabre, the general manager of SLN during a meeting with the press on 1er august. The energy battle is quantified by the IGF report at 4.15 billion euros. An investment that only the State is able to support, New Caledonia being “on the way to a cessation of payments”as Yannick Slamet, the member of the Caledonian government in charge of the budget, admitted at the beginning of July.
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