24 Apr 2008

New Caledonia's Goro nickel project under cloud

4:35 pm on 24 April 2008

There is concern in New Caledonia over the future of the Goro Nickel project which has been affected by protests that have prompted the contractors to stop working on a pipeline for the plant's effluent.

The local daily newspaper, Les Nouvelles Caledoniennes, has been told that abandoning the project in the face of the various obstacles would amount to a catastrophe.

The project is the biggest metallurgical construction site in the world and has seen its owner, Vale of Brazil, invest more than three billion US dollars in Goro, with plans to start production before the end of the year.

Goro's management has declined comment but one union says it hopes the project won't be stopped although he says it is possible.

The plant is awaiting a new operating licence while being faced by environmentalists who want Goro closed as it might pollute the lagoon earmarked as a Unesco World Heritage site.

Observers say Vale offer to buy Xstrata for 90 billion US dollars shows the Brazilian miner has the means to absorb a suspension of Goro until it can muster support for Goro to be completed.