Page 13 - IB April 2021

Mining Mining

nary bid for VNC’s assets. The Korean corporation is one of the environmental expertise, which is a precondition for any
world’s leading producers of zinc and other metals, and has resumption and restart of the smelter.”
extensive industrial experience in hydrometallurgy. Under this FLNKS spokesperson Daniel Goa, president of the largest
bid, New Caledonia’s three provinces would have jointly held independence party Union Calédonienne, told the meeting
a majority shareholding in a new venture. that USUP was calling for “an economic and industrial project
SOFINOR/SMSP, in partnership with the transnational cor- that is viable and sustainable and truly directed towards the
poration Glencore, already runs the Koniambo smelter in the construction of our nation and not short-term financial inter-
Northern Province. Locally owned, SMSP is a major exporter ests. Today, we are ready to put such a project on the table
of nickel ore to two nickel smelters in Korea and China, with for negotiation. This is a proposal which respects our political
SMSP holding 51% control in partnership with Posco (Korea) vision, that the wealth of our country must serve its develop-
and Yinchuan (China). SOFINOR/SMSP also holds 51% of the ment and not its plunder.”
Koniambo Nickel SAS joint venture, a sharp contrast to the The debate was transformed in February by the collapse
Southern Province 5% holding in the Goro project. However of New Caledonia’s government, after the resignation of five
conservative anti-independence politicians in Noumea op- independence representatives from the multi-party execu-
posed any expansion of SOFINOR into the Southern Province, tive led by President Thierry Santa. The incoming government
with Provincial president Sonia Backes arguing: “This is elected by New Caledonia’s Congress now has a majority
unfeasible economically and unthinkable politically. Those of pro-independence members, for the first time since new
who propose this have a desire to economically colonise the political institutions were created by the Noumea Accord in
Southern Province.” 1998. Even though the pro-independence majority (six of 11
Following failed negotiations in mid-2020 between Vale executive members) were unable to decide immediately on a
and the Australian company New Century Resources, another new President, the shift in political leadership made it clear
bid for Vale’s assets was announced last October by Prony to all that a negotiated compromise was necessary to finalise
Resources, backed by commodity traders Trafigura. Indepen- the future of the southern smelter.
dence leaders argued that this consortium did not have the The deal came together in early March, brokered between
technical expertise to manage the complex hydro-metallur- the Southern Province, ICAN and USUP. Provincial president
gical process at Goro. Angered by the dismissal of SOFINOR’s Sonia Backes, a leading anti-independence politician from Les
bid without allowing Korea Zinc to conduct due diligence at Républicains calédoniennes, negotiated directly with custom-
the site, the FLNKS and customary leaders said that Prony’s ary leaders and Roch Wamytan, speaker of New Caledonia’s
proposed corporate structure would not guarantee long-term Congress and himself a high chief from Saint Louis, the Kanak
majority control by local interests. tribe on the outskirts of the capital Noumea.
Announcing the new deal on 4 March, Wamytan said: “After
Kanak mobilisation several months of tension followed by discussions around
To press the case for Vale to delay the sale, customary lead- the restarting of the southern smelter, all parties have been
ers in the South formed a negotiation structure, the Instance aware of the need to find a compromise. Political parties, our
Coutumière Autochtone de Négociation (ICAN), which links governing institutions and customary leaders are all aware
eight high-chieftainships and the customary council of Djubea- of the risks for investors, employees and more generally the
Kapumë, together with the Rhéébù Nùù committee. ICAN’s economic and environmental interests of New Caledonia.”
support for SOFINOR’s bid was echoed by the “Usine du Sud,
Usine Pays” (USUP) collective, which unites FLNKS members New corporate structure
and local indigenous activists. The new corporate structure of Prony Resources New
For months in late 2020, the proposed sale was delayed as Caledonia provides a complex mechanism to engage local and
New Caledonia was racked by protests, blockades and vandal- overseas interests, as well as New Caledonia’s three provinces
ism at the mine site. Rioting in Noumea in early December and customary leaders.
exacerbated growing tensions between supporters and oppo- Along with foreign investors, the company will be built
nents of independence in the government and Congress. After around the Société de participation minière du Sud calédonien
Korea Zinc withdrew its bid on 7 December, Vale formally (SPMSC), a holding company that operates on behalf of New
accepted the bid from Prony Resources and Trafigura, but Caledonia’s three provincial administrations in the North,
protests continued over the summer, delaying the finalisation South and Loyalty Islands. Shareholdings in the new company
of the sale. will be capped at: 30% for SPMSC; 21% for local investors,
To keep up the pressure, USUP held a mass meeting at the customary landowners and employees; 19% for Trafigura; and
east coast town of Ponerihouen on 16 January, resolving that 30% for Prony management and international investment firm
“our objectives have not changed and we reconfirm that the Agio Global. In contrast to the original bid issued in 2020 by
current Prony Resources bid does not provide an acceptable Trafigura and Prony Resources, the 51% controlling interest
option, from either the environmental review or the pro- for New Caledonians cannot be watered down by future share
posed economic and industrial model.” The meeting called releases.
for “feedback on the stated demand in terms of independent Under the new deal, a central part of the revised operation

Islands Business, April 2021 13