Page 27 - Islands Business September 2023

New Caledonia New Caledonia

Therby noted: “If you
want to have competitive
metallurgical activity in New
Caledonia, you have to give the
metallurgists a good price for
electricity. Energy is clearly the
first problem to solve, to have
a better cash cost.”
The new IGF report confirms
that New Caledonia’s “energy
costs can be twice that of their
Indonesian competitors (whose
energy is de facto subsidised)
and account for up to 50% of
plant costs (compared to 8-16%
for personnel costs). This price
difference increases their costs
by tens of millions of euros per
year.”
For years, SLN has debated
alternatives to its ageing SLN Doniambo.
coal-fired electricity plant, but
Eramet dithered and wouldn’t
allocate funding to shift to sustainable energy. In desperation, Caledonian laterite ore to produce nickel sulfate and cobalt
SLN hired a floating power plant from Turkiye-based specialist sulfate. QPM has already lined up ore supply agreements with
Karpowership in 2022. The plant, sitting on a giant barge at four New Caledonian companies: SLN, Société des Mines de la
Noumea’s wharf, generates the 180 megawatts needed to Tontouta (SMT), Société Minière Georges Montagnat (SMGM),
power SLN’s Doniambo smelter – for now. and Maï Kouaoua Mines (MKM).
Any long-term replacement for energy supplies will require
further investment. But without private backers, the French SMSP in Korea
State will require concessions if it is to fund more sustainable Following the lead of his predecessor Andre Dang, SMSP’s
generating capacity. As President Macron said on 26 July: “Let Karl Therby has oriented the company to collaboration with
us be clear, only the State can finance this. But I’m going to Asia, based on a strategy to export lower grade nickel ore to
be serious: I won’t use taxpayers’ money to fund unproductive Korea and China. Similar to the partnership with Glencore, the
models.” joint ventures in Asia are controlled 51% by SMSP.
The company has two joint ventures with the Korean
Markets in Asia corporation POSCO: the Nickel Mining Company (NMC) and
For Paris, the current financial crunch provides an the nickel processing company Société du Nickel de Nouvelle-
opportunity to re-orient New Caledonia’s resource sector Calédonie et Corée (SNNC), which began smelting nickel in
towards France and the European Union (EU). 2009 at Gwangyang. A further joint venture between SMSP
That’s a major shift. Currently, the largest export markets and Chinese corporation Yangzhou Yichuan Nickel Industry
for New Caledonia are in the Asia-Pacific region, not Europe. Co Ltd began ore exports to China in 2018. However this
In 2022, the Melanesian nation’s principal export destinations venture foundered as borders and communication closed down
were to China (with nearly 30% of trade, especially nickel ore), during the COVID pandemic, amid disputes over legal liability,
followed by Korea (14.8%), Japan (13.5%), and Taiwan (12.5%). insurance and guarantees.
France lagged behind at 8.7%. SMSP’s Karl Therby said that ties with Asian nations are
In 2016, exports to Australia were destroyed virtually being reinforced as countries look to the future of electronic
overnight, as Queensland Nickel’s Yabulu smelter – owned by vehicles, with massive global demand for nickel to use in EV
flamboyant entrepreneur and failed politician Clive Palmer – batteries.
went into liquidation. Now the ore trade with New Caledonia’s “Years ago, we saw that the market will be split between
near neighbour is reviving, through a new company, ferronickel for stainless steel and nickel for the battery
Queensland Pacific Metals (QPM). market,” he said. “Since the middle of last year, all the
QPM needs up to 2.1 million wet metric tonnes of nickel ore nickel for batteries is paid in reference to the London Metal
each year for its proposed Townsville Energy Chemicals Hub Exchange (LME), while all the ferronickel and Nickel Pig Iron
(TECH). With investment from General Motors and Korea’s LG is based on a price from the Shanghai Metal Market (SMM).
Energy Solutions and POSCO, the TECH refinery will generate
materials for electric batteries, processing high-grade New Continued on page 31

Islands Business, September 2023 27