27 Oct 2005

Fears grow that northern nickel mining project in New Caledonia will not go ahead

3:10 pm on 27 October 2005

Fears are growing that the nickel mining project in the north of New Caledonia will not go ahead following the merger of the two key players in the territory's nickel industry.

Canadian companies Falconbridge and Inco, which are planning to open nickel mines in the north and south respectively, have merged to form the largest nickel company in the world.

The northern project, which has been seven years in the planning, will get a huge ore deposit at Koniambo if Falconbridge commits to spending 100 million US dollars by the end of this year.

But Kanak activist Jacques Boengkih says the surprise merger has led to heightened rumours that Falconbridge may either not go ahead with the project or close the mine once they have taken the ore.

Mr Boengkih says the latest rumours are that the French state owned company, Eramet, wants to take the project on themselves.

"They are ready to take over the project and they've been issuing some messages saying if Falconbridge is not in the position to go ahead with the project, they are."

Mr Boengkih says that some local politicians have supported this proposal, in fear that if the project fails, the area will return to instability.