Page 31 - Islands Business September 2023

New Caledonia New Caledonia

NEW CALEDONIA’S NICKEL SECTOR

FACES ENERGY CRUNCH

Continued from page 27

The price difference between the two is
huge. Today the LME is around $22,000
[a ton] while the SMM is around $13,000
– a gap of $8,000 or $9,000 between the
two.
“South Korea has no natural resources
but they’ve got major companies like
POSCO or LG who want to invest a lot
in the battery market and become a
worldwide player,” Therby added. “For
that, they need to secure the natural
resources. I think South Korea is a good
opportunity for us and New Caledonia is
a good opportunity for South Korea.”

Looking to the future
In May, President of New Caledonia,
Louis Mapou travelled to Seoul for the
inaugural Korea-Pacific Islands leaders’
summit, hosted by President Yoon Suk Koniambo nickel smelter in Northern Province.
Yeol. While in Korea, Mapou visited the
Gwangyang site and held discussions
with POSCO and SNNC management. For Karl Therby, this very low for New Caledonia,” he said. “You cannot be
political dialogue reinforces SMSP’s existing ties: “There was competitive against Indonesia. They’ve got no environmental
a strong message – they want to have a stronger relationship policy; they’ve got no rules. Here, you’ve got strong rules
between SMSP and POSCO, but also between South Korea and for environment and for people, and this has a cost. If we go
New Caledonia.” into the battery market, we will increase the price, so we are
POSCO is the world’s largest producer of stainless-steel also in discussion for Koniambo to change format, as we did in
using ferronickel, but is planning to use New Caledonian ore SNNC.”
to make higher grade nickel matte, a crucial product used for As New Caledonian politicians debate a new political status
electric vehicle batteries (unlike Nickel Pig Iron produced in to replace the 1998 Noumea Accord, the geopolitics of nickel
an electric blast furnace with 10-13% nickel, the nickel matte underlies crucial decisions about the viability of the economy.
conversion process increases the grade and typically contains But looking at the future of the nickel sector, France wants
70-80% nickel). to maintain control of this key industry, in the interest of EU
In July 2021, SMSP signed an agreement with POSCO to corporations.
begin its entry into the electric vehicle battery market. While The Finance Ministry’s IGF report bluntly notes that “the
maintaining ferronickel production, the SNNC joint venture rapid emergence of Indonesian players, mainly financed
will diversify production at the Gwangyang plant towards by Chinese industrialists (often integrated), leads to the
matte as well. formation of an oligopoly posing a double risk to the European
Construction of the nickel matte plant at Gwangyang Union’s supplies. The EU’s domestic production capacity
started last year and Therby says it’s on schedule: “Production currently covers only 10-25% of its nickel battery needs,
will begin at the end of October or beginning of November – estimated at 541 kilotonnes in 2035. In this context, the
only 2,000 tonnes of matte this year, but next year the ramp nickel sector in New Caledonia could be an asset to secure
up will be very quick. Next year, we hope to produce 21,000 European supplies.”
tonnes of matte that will be sold directly to POSCO.” For New Caledonians wanting to control their own economy,
For Therby, it was a crucial strategic shift: “If we stay in the create jobs for young people and add value to their mineral
ferronickel market, we will die. resources, the battle over nickel has a long way to play
“The price for ferronickel is $13,000 a tonne and that’s out.

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