New Caledonia: Nickel – Market Insights

There are currently three key players in the nickel sector over in New Caledonia. French-owned ERAMET has been present in the country for over 120 years now and operate mines in New Caledonia through their subsidiary, SLN (Société Le Nickel). 
They have in total five operations, which are mostly concentrated in the centre of the island at Kouaoua, Thio, Nepoui, and Tiebaghi, not to mention the biggest nickel processing plant in the world, Doniambo.
Vale are the second big player in town, and have the formidable Goro Nickel project under their ownership. 
This mine is located in the South of the island. It began operations in August 2010, with over 55 million tonnes of estimated mineral reserve. 
Estimated annual production is around 60,000 tonnes of nickel and 5,000 tonnes of cobalt. This is an open pit operation with a processing plant on site.
The third and final significant player is SMSP in joint ownership with Glencore Nickel. 
The Koniambo mine started open cut operations two years ago in the north of the country, again with a processing plant on site. Koniambo will be an important contributor to New Caledonia’s mining future, being a high-grade nickel deposit of 6.1 Mt of contained nickel that has a current forecast of 25 years of operations.

So why Nickel?

Nickel is currently a very promising resource. World demand is constantly growing, at an average rate of 5 per cent per annum. 
Supply has dropped off recently from two of the top exporting countries: Indonesia and the Philippines. 
In January 2014, Indonesia brought in a legislative change which means nickel ore must be processed now in Indonesia before exporting it, instead of exporting the raw ore. However, the country doesn’t have capacity to currently process the volume of ore they would need to in order to maintain export levels, so this has inevitably resulted in delays. Floods late last year in the Philippines also naturally caused an impact on their nickel supply.
Due to both of these incidents, there is anticipated to be a nickel shortage supply later this year. 
New Caledonia has an opportunity to take advantage of this and become the leading nickel provider in 10 – 15 years, (other current big players are Russia, Canada and Australia) and supply 20 – 25 per cent of all the nickel in the world.
New Caledonia is a small island, but with a tremendous wealth of both nickel and cobalt resources.
Both Glencore and Vale globally are driving to save on production costs and improve safety and efficiency, so Australian METS who are aligned with these strategic goals certainly stand a good chance of success over in this market. In fact, numerous companies have already done business in New Caledonia, such as ABB, Orica, Leighton Holdings, Hatch, ATCO and others.
Austmine’s mission to New Caledonia on 4 – 8 May 2015 will include site visits and meetings with all the three major players.