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News Release

New Caledonia: Inco Faces Protests, Delays

In July of this year, Inco was suddenly granted a six-year exploration permit (PRA) for a massive concession called Prony, which is adjacent to its Goro development in the southern part of the South Pacific island of New Caledonia. Since then, Inco has been plagued by protests over the granting of the Prony concession, and a major walkout of construction workers at the Goro site.

In August a powerful coalition was formed in New Caledonia in protest of Inco's plans to develop 100-year nickel mines in the fragile ecosystems of New Caledonia. This coalition, the Collective for Defence and Control of the Prony Heritage (CDCPH), is made up of organizations from a wide range of political persuasions, trade unions, environmental groups, traditional landowners, feminist groups, human rights groups and indigenous organizations. The Collective has staged massive demonstrations in the streets of New Caledonia requesting that Inco's prospecting license for Prony be revoked, that the new French government finalize procedures requesting UNESCO to place New Caledonia's reefs on the World Heritage list, and that the territorial government draft a bill on environmental protection.

Inco's plans to develop the Goro site have also hit numerous roadblocks. Inco's Environmental Impact Assessment that was tabled in March has been broadly critiqued in scientific review by French consultants INERIS. Inco still has not been granted a permit to mine, but the firm is pushing ahead with construction at the site. Complaining of bad planning and organization, Australian BTH workers contracted to construct the site walked out and flew back to Australia in September. Following urgent negotiations, sub-contractors and two unions have agreed on a code of conduct to avoid further disruption on the construction site.

Inco now admits the planned starting date for the mine has been pushed back to the first half of 1995 and that costs of the $1.4 billion mine will run over by at least 15%.

Inco currently owns 100% of the Goro project, having recently bought back the French government's 15%, but hopes to eventually share ownership maintaining a 70% stake. In an agreement in principle with a consortium led by Sumitomo Metal Mining Company Ltd., Sumitomo will buy up 25% of the project (Nickel Australasia: August 21, 2002). While Inco also has an agreement in principle with the French government for some $350 million of "very favourable tax assisted financing" for the project, to date Inco has not secured financing for the mine.

A Kanak member of the New Caledonian Congress, Nicole Waia, says the Goro nickel plant is not needed and is unlikely to be built. Nicole Waia says the project is faced by delays and unresolved issues. She says these include the environment, the planned arrival of thousands of Filipino workers and controversy over mining rights at Prony. "Frankly, we don't need Inco here because SLN [Societe Le Nickel, owned by Eramet] is here in the south and SMSP [Société Minière du Sud Pacifique] is in the north, so the balance of the country is there," she said (Asia Pulse, Noumea, October 29, 2002).