By Jaleesa Simpson and Danielle Veivers
New Caledonia in the Southwest Pacific may be thriving on its nickel industry; but even as potentially the world’s second largest producer of nickel it struggles to employ local people.
Yearly nickel exports of A$121-million to Australia alone are a large enough undertaking for the island territory with an estimated population of 260,000.
Yet despite the strength and promise of this dominant industry, unemployment stays high, dropping from 58.9% in 2005 only to 57.6% by 2011 – too slight to be a good promise of better times to come.
In the orderly streets of Noumea the capital, groups of people are around at any time, passing the time; many just enjoying the town, but as with other places worldwide, also a sign that jobs to go to, can be few and far between.
Among chomeurs in the town there is a clear mix of young and old.
Gender looks to be a more predictable demographical barrier to employment.
However this may be due to cultural, economic, or social causes, the population survey figures from 2011 show 46.8% of women were employed compared to 68.4% of men.
Mining may be the key to future growth but by its volume and potential economic impact has put nickel at the centre of the stressed politics of this Overseas Territory of France.
Vaea Frogier, from the conservative party in government, the Rassemblement-UMP, argues that continuing dependence on France will help maintain and produce jobs.
Cutting ties with France would leave the island community open to effective take-over by companies that have more employees than the whole of New Caledonia’s population.
“Because mining is such a massive industry and we’re a tiny country, we want to have France protecting us,” she said.
“Otherwise we’ll be swallowed by Brazil…Our point of view is the nickel mined from New Caledonia should come back first and foremost to benefit the New Caledonian people.”
Ms Frogier has had a thorough training, as a municipal councillor, and a person from one of the leading families in the settler community, the ‘Caldoches’.
She describes the complications of a big metals industry getting under way, with three main companies:
Local investors, by tradition, have a 4% interest in the established nickel company SLN, the balance held by the French government. Its refinery is close to Noumea, which spread out and developed around it, and the company employs some 10,000 workers.
It stands to be dwarfed by the new open cut operations, in the North and South of the main island – the Grand Terre.
The Northern mine is 49% owned by Glencore from Canada (that share previously held by Extrata), and 51% owned by the Northern Provincial government. In elections this year, that authority was captured by the Kanak movement, the FLNKS, with its militant wing in majority – a complication for any new round of politicking.
The Southern mine is owned by the large Brazilian conglomerate Vale. It’s located in the populated and economically depressed Southern province, and is the object of often-violent protest – most recently protests over accidents resulting in acid spillage into local streams.
Vaea Frogier comments that the two mines, over some five years, are still working at no more than half capacity.
Reflecting the anxiety about the difficulties of handling ‘Big Nickel’, she points out that the companies were allowed to enter New Caledonia by a government hungry to see development, tax-free – up to the time when they came into full operation.
Whenever they do that, the effects will be “huge”, but under the terms of agreement it may be another 20 years, and in the meantime – dividends but no royalties.
Moves to stimulate the economy have included the transfer of large funds to the three provinces – North, South and the other Islands – to stimulate employment.
With much of the unspent, it has not stopped a steady drift of people towards Noumea looking for work, bringing out some of a politician’s irritation.
“They stashed that money away and people flocked to Noumea in search of jobs,” says Ms Frogier.
New Caledonia does have a sovereign wealth account, its Future Generations Fund, but with nickel as the main business slow to start contributing, the balances as yet are far from enough to make a transformation.
Danielle Veivers adds
‘Big mining’ begets power and that lesson has been learned in New Caledonia, Australia’s near Pacific neighbour, in its efforts to expand its nickel industry on a major scale.
The economy is highly reliant on the nickel mining industry, and differences and indecision over it have created an impasse in the government elected on 14 May this year.
The separatist component of the composite government that brings together the opposing parties, has its own differences, and by the end of June had not been able to exercise its option of naming a Minister for the key mining portfolio.
The Australian Consul General in Noumea, Heidi Bootle, said that the government should aim to resolve the issue quickly.
“If the issue is not resolved … it will mean that the government is not functioning properly,” she said.
Australia’s main focus in New Caledonia is on educational cooperation, and mining, with Australian companies now extremely prevalent in the mining industry, particularly maintenance, equipment management and warehousing.
There are three main nickel mines in New Caledonia – Goro, Koniambo and Nakety – and recently Goro mine, in the South of the country, experienced an acid leak, the second acid spill in five years.
It caused a community outcry in the St Louis district South of Noumea, the protests turning into violent demonstrations by gangs of young men – stoning vehicles and creating road blocks over the past three weeks.
The Rassemblement – UMP party is strongly anti-separatist, and its spokesperson, Vaea Frogier, sees the latest trouble as a threat to jobs, and credited it to “general teenage delinquents wanting to do stupid things”.
“It is just idiots being idiots and unfortunately they are affecting over 20,000 people,” Frogier says.
The nickel mining industry benefits the country’s economy through employment and dividends, and few in the territory want a permanent tax holiday for the industry.
“Our point of view is that nickel mined in New Caledonia should benefit New Caledonia first and foremost and that people employed in the mines should pay taxes in New Caledonia,” Ms Frogier said.
Nickel production accounts for seven to ten per cent of New Caledonia’s GDP, and this industry is expected to grow exponentially.