BUILDING A NEW SMELTER—AND A NEW SOCIETY
Looking down from the mountains onto the Vavouto construction site, it’s like a children’s sandpit filled with toy trucks. At ground level, however, massive dump trucks roar by at great speed, mechanical diggers are carving their way through the mountainside and a barge offshore is dredging a path to the newly constructed wharf.
Construction has begun for the long-awaited Koniambo project that will transform the economy and society of New Caledonia’s Northern Province.
The country’s south hosts the major tourist, nickel processing and service industries.
For over a century, ERAMET / Société Le Nickel (SLN) has smelted nickel at the Doniambo plant in the capital Noumea.
But now Noumea’s central role on the economy is being transformed, as two major construction projects are underway at Goro in the south and Vavouto in the north.
With an open cut mine, nickel processing plant, 350MW power station, desalination complex, mining town and deepwater port, the Koniambo project will have an impact on the whole Northern Province.
In a region with a largely Kanak population, Koniambo is seen as a major step in the economic and social rebalancing of New Caledonia, one of the central planks of the 1998 Noumea Accord.
The US$4 billion project is run by Koniambo Nickel SAS (KNS), a joint partnership between the Swiss conglomerate Xstrata and the Société Minière du Sud Pacific (SMSP), the mining company majority controlled by the Northern Province.
The processing plant is scheduled to operate from late 2011, aiming for the production of 60,000 tonnes of nickel a year.
But for Provincial President Paul Neaoutyine, the project has been a long time coming.
“Even in the 1960s, General de Gaulle (Charles) saw the need for the development of a smelter at Tiebaghi in the north of New Caledonia, and economic rebalancing and development in the north was always a dream for Jean-Marie Tjibaou.”
He adds: “If you read the papers today, there are some people saying that this is moving too slowly and others are saying it’s too fast. Well, it’s slow when you think that we were talking about this in the 1960s, and even when we started working on the project in detail in 1994.
“But for young people who want work but have to go through training, or local businesses who want to get involved in the operation but can’t meet the technical requirements, they’re concerned that everything is moving too fast now that construction is underway.”
There are major changes in the Voh – Kone – Pouembout (VKP) corridor along the north-west coast of New Caledonia’s main island, in an area that has seen little industrial development. Trucks roar along the main roads, while new housing estates are springing up around the provincial capital Kone and nearby Pouembout.
Booming: One resident from the Kanak tribe of Baco notes: “When we went into town, we used to know everyone we met in the shops. Now, you hardly know anyone, and you hear accents from all over—Canadian, Australian, Belgian and more.”
The construction work is drawing in people from around the province, looking for jobs in a country where there are significant disparities in employment rates (at the last census in 2004, the unemployment level was 11.4 percent in the European-dominated southern province, compared to 28.4 percent in the Northern Province and 38.9 percent in the Loyalty Islands where the population is largely Kanak).
Today, young people are being trained as far afield as Canada and there are ads in the local media encouraging young women to retrain and take up jobs in non-traditional areas.
For Neaoutyine, it’s taken a project this large to generate other activities in the province, and he says this has political as well as economic impacts.
“In the province, we’ve put in place training programmes so that there are a range of young people with qualifications,” he states. “We now have cadre to run things, we’re managing the political institutions and the municipalities—indeed, most local governments are run by the pro-independence parties.”
Even as the economy is being transformed, the majority of the population still live in rural villages and the provincial government is working to promote Kanak culture.
For Patricia Goa, chair of the province’s Cultural Commission and the youngest elected member of New Caledonia’s Congress, there’s a vital role for the provincial administration to support social and cultural activities.
“We’ve been working to entrench new cultural infrastructure around the province, to assist our people to make decisions on their future,” says Goa.
“As well as the provincial cultural centres in Kone, on the west coast and Hienghene on the east coast, we’re working to introduce libraries in every tribe in the province to promote a culture of learning. We’re also setting up multi-media centres in every town, so that Kanak children in the north will not be disadvantaged in this Internet age.”
Future of Koniambo: The future of Koniambo has been challenged by the global financial crisis and the squeeze on credit for infrastructure projects. In October, two key financiers—the collapsed banking house Lehman Brothers and the Hong Kong and Shanghai Banking Corporation (HSBC) - withdrew their financial guarantees for the project.
However, the northern project has obtained significant tax concessions from the French government and to contribute to the Northern Province’s share of financing, SMSP has struck a deal with the Korean steel corporation Posco.
Neaoutyine: ‘Things must change in the North’
Paul Neaoutyine is one of the leading pro-independence politicians in New Caledonia. Former office director for the late Jean-Marie Tjibaou, Neaoutyine served as FLNKS President between 1990-95. Leader of the Party of Kanak Liberation (Palika) and mayor of the east coast town of Poindimie, he is the elected President of the Northern Province.
He spoke toNic Maclellan at his office in the provincial capital Kone. Extracts from the interview:
Does the construction of l’usine du nord—the Koniambo nickel processing plant in New Caledonia’s Northern Province—have political as well as economic objectives?
“Building the Northern smelter has long been an objective of the FLNKS, not only to rebalance the economy between the provinces, but also to show that New Caledonia can be independent, adding value to its natural resources here rather than overseas.
“Our proposal is simple. Things must change here in the north—but this can’t just happen any how. We need projects of sufficient weight to turn things around. This is the whole challenge of economic rebalancing, which we started discussing in the Matignon-Oudinot Accords of 1988.
Paul Neaoutyine...mayor of
poindimie.
“All the things you see today in the north—new schools, training colleges, roads and other things—none of these existed in 1988. But this infrastructure was created through public investment and we haven’t had much private sector investment in the north or the islands. “There’s resource development outside of Noumea such as fishing and mining, but the main value-adding economic activities all happen in Noumea. If you want to change this and bring substantial development to the provinces, you have to have projects which go beyond a certain threshold. We want to create an arc of development from Poindimie to Touho, Kone to Pouembout, but you need a level of investment flows to make it happen.”
Over the years, there has been opposition to this project from a range of political and economic interests, including some anti-independence leaders.
“They never supported this project, and never believed it would come to fruition. They never thought that a transnational corporation would come into the project with just a 49 percent holding. But we’ve shown the project is economically feasible and we have nickel reserves to develop over the project’s lifetime.
“So the Right tried for a long time to persuade people that this wasn’t possible. It was only when everything had been worked through and the decision was about to be taken to proceed that they came on board. What we’re doing in the economic field is to show other people that we’re capable of running the country with them. Even though we don’t have enough people to do everything, I feel we’re heading towards our objective.”
More than 10 years into the Noumea Accords process, with a referendum on the country’s political status scheduled after 2014, do you think that some people are still fearful of independence?
“I’m living in the Northern Province, and as mayor of the municipality of Poindimie, the people I meet every day are not worried. We Kanaks may be in a majority here, but we’ve always encouraged others to be actors for development and to take the lead in the things they want to do. The loyalists are a minority here in the north, but I’ve never heard the Right-wing representatives, on my local council or here in the provincial assembly, say that they disagree with this. Today, all the kids at school play together. It’s not like when we were kids, where we were completely separate. We Kanaks are aware of the differences that exist—we have our own culture and traditions—but there’s no longer an inferiority complex. But it’s true to say that this is because we’re in a largely Kanak environment here in the north and things are different in Noumea. I remain optimistic. There are people who say we’re not going to have independence after 2014. But the people who are putting up resistance, I think they’re mistaken. Under the Noumea Accord, we’re heading towards our emancipation. In terms of independence, it’s true that every independent country has problems, but we have to manage those problems—that’s the challenge of independence. So as citizens, as we move towards independence, we must address those problems together. To dream of the days when you could use the wealth of the country for your own private benefit—those days are over!”
In 2004, the pro-independence parties ran separate tickets for the provincial elections in the Southern Province, and none of their candidates were elected to the provincial assembly. With elections coming up in April 2009, will the FLNKS run a united ticket in the south?
“In the south, there was no unity last time and that way the Avenir Ensemble party won a majority—we just didn’t get any seats. Each component of the FLNKS thought that it could reach the five percent electoral threshold by itself, but they couldn’t—it was a monumental stuff up. So this time, there’s no alternative—we must have a united electoral list, bringing together the pro-independence forces, other progressives, ecologists and people from the Left. If we fail to do this, it will be to the benefit of the [anti-independence] Rassemblement Party because the other Right-wing force, the Avenir Ensemble Party, is currently splitting into two. It’s different here in the north and islands, where pro-independence people are in the majority and we can run on our own. I don’t know if this analysis is shared by everyone, but for me, the only way that the Rassemblement can be blocked from returning to power is to form a united electoral list in the south, in order to reach the threshold where seats are allocated.”
Following an MOU signed in February 2006, the two companies created joint subsidiaries – the Nickel Mining Company (NMC) and the Société du Nickel de Nouvelle-Caledonie et Corée (SNNC)—with SMSP controlling 51 percent and Posco 49 percent. Over the next 30 years, NMC will mine up to 1.8 million tonnes of lower-grade nickel in the Northern Province for export to Korea, while SNNC has built a nickel processing plant at Gwangyang in South Korea, with the aim of producing 30,000 tonnes of nickel alloys each year.
In June 2008, the first shiploads of 150,000 tonnes of ore mined at Ouaco left for Korea, and in November production began at Gwangyang. The use of existing mine sites and lower grade ore to feed the Korean plant will allow higher grade ores to be used in the new plant being constructed by Xstrata.
For Neaoutyine, the Korea project is a vital part of the equation.
“The revenues that start flowing from the Gwangyang project in 2009-10 will contribute to SMSP’s capacity to refinance our share of the Koniambo operations,” he argues.
“This has a political objective—to emancipate the country through economic development, drawing on our natural resources to promote sustainable development and move towards independence.”
