21 Nov 2005

US asks for more information about merger of nickel mining companies involved in New Caledonia

10:31 am on 21 November 2005

US antitrust regulators have asked for more information about the merger of the two large Canadian mining companies which have huge nickel projects in New Caledonia.

Inco and Falconbridge have each two-billion US dollar projects in New Caledonia and are set to merge to become the world's biggest nickel company.

Inco says it will soon reply to the US justice department request to give more information about its takeover of Falconbridge.

A leading politician in Noumea, Pierre Frogier, says the 1998 Bercy accord about the project in the territory's north, which involves Falconbridge, has to be enforced.

Under its terms, 100 million US dollars has to be committed before the end of next month to build a nickel plant and as an incentive, the French state will release huge ore reserves at Koniambo to launch the project.

But Mr Frogier says the merger talks in Canada have created great uncertainty and the French state has to take the initiative.

The head of Inco says should the merger be approved, one of the New Caledonia projects may be delayed - a reference to the northern project as the Inco plant in the south is being built.