Protests over mining and independence hit New Caledonia
11 Dec 2020|

Violent disturbances over nickel production, with implications for Australian security, in our close French neighbour, New Caledonia, have attracted attention in Paris, but not here. Only Nic Maclellan, true to excellent form, has written about these significant recent developments.

New Caledonia is in the middle of a long-promised self-determination process. It has held two of a possible three independence referendums. The first, in November 2018, delivered a 57% to 43% vote to remain with France; the second, held just weeks ago, in October, reduced that support to just over 53%, with just under 47% voting for independence. In both polls, independence support came primarily from indigenous Kanaks. A final vote may be held at end of 2022.

Recent violent protests centred on New Caledonia’s rich nickel deposits—it holds around of 25% of global nickel reserves—should be of serious concern to France and neighbours including Australia. Nickel has been at the heart of independence demands ever since France began to roll back autonomies it extended after World War II, because the local people wanted to invite foreign investment in competition with the colonial French mining company SLN (Société Le Nickel). France’s tighter control and related migration into the territory led to an independence movement in the 1960s and 1970s, with serious violence against French security forces occurring by 1988.

A succession of agreements followed, promising increasing autonomy and culminating in the referendum process currently underway. Underpinning those agreements were understandings, known as the ‘mining prerequisite’, about redistributing the benefits of the archipelago’s main resource. Before then, the rich returns of SLN’s one colonial nickel plant went primarily to France.

Rebalancing provisions included building two multibillion-dollar nickel plants, one in the mainly Kanak north, and the other, Goro, in the mainly European south. The northern plant is 51% owned by Northern Province–controlled SMSP. The southern plant has been run by Vale Brazil. Both have been plagued by technical and financial problems, aggravated by the notorious volatility of global nickel markets.

In December 2019, Vale said it would sell Goro. Australia’s Century Resources indicated an interest, but pulled out in September, a month before the second independence referendum, after Kanak leaders expressed dissatisfaction with foreign ownership, advocating instead a ‘Southern plant = country plant’ solution, under which New Caledonia would hold the largest share. Kanak independence leaders opposed Vale’s negotiations with a Swiss investor, Trafigura, proposing instead that a Northern Province statutory body, Sofinor, share majority ownership with Korea Zinc.

Loyalist parties based in the south vehemently opposed the Sofinor proposal. By early December, regular protests and demonstrations led by independence parties had turned into road blockages, and stoning of police. Police officers were hurt in confrontations on 7 December, and on 11 December protestors tried to ram through the police protection at Goro. Police fired shots in response.

Unsurprisingly, Korea Zinc withdrew its interest on 7 December, with Sofinor announcing another potential partner. Protest leaders accuse France and loyalists of manoeuvring to prevent a majority local interest in the project.

Minister for Overseas France Sébastien Lecornu has denied manipulation of the issue and invited all parties to Paris for discussions about local participation, not simply in Goro, but in SLN and the northern plant. He has linked a round-table on nickel with a third referendum and broader issues. So far, his efforts to initiate sorely needed discussions about the future of New Caledonia have not been productive.

These latest developments are disturbing because they hark back to the disturbances of the mid-1980s, and they are occurring at a critical turning point for New Caledonia. No doubt independence leaders are asserting their new-found and growing electoral support shown in the independence referendums so far.

Any talks about the future of New Caledonia must address the production and distribution of nickel revenues. Independence leaders point to years of broken promises for a strategic review of nickel under three decades of peace agreements. They have chosen a fundamental centre of gravity in the history of their independence movement with which to up the ante as the agreements come to an end.

The best that can be hoped is that the escalating protests will cease and talks will take place between all parties to resolve the immediate problems surrounding nickel development, which will hopefully lead to more productive negotiation between loyalists and independence leaders about a shared longer-term future.

Australians should be closely watching these developments. New Caledonia forms part of the strategic buffering arc to our northeast and is located along our eastern sea routes. At a time of increasing tension with China, heightened uncertainties around the future of New Caledonia, frustrated independence supporters, and its coveted nickel resource, are worrying.