Page 17 - IB FEB 2019

Business

Co Ltd to develop a joint project in China. river channel, but the first shipment of ore from New Caledonia
This MOu was expanded on 22 March 2018 aboard MV kiran Caribbean amounted to 62,500 tonnes. With-
when Andre Dang met yichuan CeO Zhang out informing SMSP or the New Caledonian mining directorate,
Jianguo to finalise a memorandum of agree- yinchuan unloaded 16,006 tonnes at Lianyungang port rather
ment (MOA). than deliver the full load to the yangzhou smelter.
These preliminary agreements were de- To assert their rights as controlling partner, Andre Dang halted
signed to test export systems to China before further shipments until the Chinese company apologised and
finalisation of a full contract, under which agreed to bear the costs of transhipment to smaller vessels.
SMSP agrees to deliver 600,000 tonnes of When shipments resume, this will allow all the ore to be used at
Andre dang nickel ore to yichuan each year for the next the yangzhou smelter, thereby generating maximum returns to
25 years, after the Chinese corporation SMSP as controlling partner of the operation.
agrees to sell 51 per cent of its share capital to SMSP. For Andre Dang, this strategy of maintaining majority control
SOFINOR’s karl Therby explained that yichuan’s pyro-met- over operations avoids many of the problems that independent
allurgical smelter at yangzhou began production in 2012 using Pacific countries have faced with Chinese investments, including
Indonesian minerals, but soon turned to New Caledonia. the over-use of Chinese labour, poor environmental standards
“The Chinese had been purchasing nickel ore from Indonesia, and pressure on local politicians.
but they had a range of concerns about the quality, the humidity “As long as I’m at the company, I will never allow it to sell nickel
of the ore and of the reliability of delivery,” Therby said. “So SMSP ore directly to China,” Dang said. “I only want our resource to be
was able to say to them that, through our korean operation, we used in New Caledonian plants or those that will be owned by
have shown our capacity and reliability to export ore of higher New Caledonia in the future and that will supply benefits to our
quality than can be found in the Indonesian market. By signing country. I’ll be travelling soon to China to make our policy clear
the contract with us, they’ve guaranteed supply but we retain to them. We’re going to shoot ourselves in the foot if we simply
51 per cent of the operation.” provide raw minerals to our competitors. That’s been going on
The decision to operate offshore in korea, and especially in for 140 years, ever since colonisation. We want to ensure the
China, was driven by domestic politics as well as market realities. continued existence of our mines, because nickel is not a renew-
Conservative anti-independence parties in Noumea are fiercely able resource. Once you’ve exhausted it, bit by bit, that’s the end.
opposed to Chinese investment in New Caledonian enterprises, so “We don’t want New Caledonia to end up like Nauru,” he said.
SOFINOR and SMSP have developed new ways of working with- “They were a world leader in phosphate mining, but they abused
out Chinese companies operating in New Caledonia (a contrast to it and used it all up. They are a sad country. So our strategy is
the troubled Chinese investment in PNG’s Ramu nickel project). to add value to the resource which can generate funds for use in
SOFINOR’s karl Therby explained: “In our political context, sectors beyond the nickel industry, which will benefit the country
with referendums on independence and public concern about and future generations.”
Chinese influence, we don’t want them to operate here. We’ve r nicmac3056@gmail.com
seen what has happened in Papua New Guinea, we’ve seen what
has happened in Vanuatu and we want to protect the territory TRADE MARK CAUTIONARY NOTICE IN MICRONESIA
from all that. So they have no actual investment in our mines; Notice is hereby given that Sumitomo Ruber Industries,
instead, we just have a contract to supply them.”
Andre Dang said that this strategy is based on an unprec- Ltd., manufacturers and merchants of 6-9, Wakinohama-
edented corporate structure giving majority control to SMSP cho 3-chome, Chuo-ku Kobe-shi, Hyogo 651-0072, Japan (a
rather than the Chinese partner. corporation organised and existing under the laws of Japan), is
“The corporate structure is a real innovation and it’s the first the sole proprietor in Micronesia and elsewhere of the following
time in the world that it’s been used, above all in China. The struc- trade mark:
ture of 51 per cent / 49 per cent - the Chinese have never before
accepted this. The Chinese government was obliged to change
a law and it took seven years to allow SMSP to start operations
there. We’ve just taken one small step into the Chinese market.”
He added: “After that we’ll see, because the Chinese are very Used in respect of:-
intelligent. We have to be very careful, because they can be ter-
rible! The Chinese aren’t here, they’ve stayed at home! Instead, Class 12
we’ve gone over there and have taken possession of a small
piece of their country, through our 51 per cent control of the
smelter. The cost of operations will be paid for by the profits Tires for vehicles; tires for automobiles; tires for trucks; tires for
from the smelting.” buses; tires for two-wheeled motor vehicles.
In 2018, after striking an agreement with SMSP, yangzhou
yichuan Nickel added a second production line to its yangzhou The said proprietor claims all rights in respect of the above trade
smelter, increasing potential annual production capacity from mark and will take all necessary legal steps against any person
5,000 tonnes to 25,000 tonnes of ferronickel. The metal is then or company infringing their said rights.
sold to stainless steel producers in China. In July 2018, North-
ern provincial president Paul Néaoutyine paid an official visit DAVIES COLLISON CAVE PTY LTD
to China, to meet with officials from yangzhou City and major Intellectual Property
shareholders from the yangzhou yichuan Nickel. 1 Nicholson Street
The first shipment to China under the MOA, departing Noumea
in late July 2018, caused initial problems. The yangzhou port only Melbourne, Victoria, 3000
has capacity for vessels weighing 45,000 tonnes in a shallow AUSTRALIA

Islands Business, February 2019 17