The nickel mining company owned by the northern provincial government of New Caledonia says it's made an irreversible decision to build a processing plant.
SMSP says it's going into partnership with the Canadian company Falconbridge.
France signed a deal in 1998, under which it would hand over the rights to a massive deposit of nickel ore at Koniambo if the northern province agreed to go ahead with construction by the end of this year.
The French minister for overseas territories, Francois Baroin, has welcomed the decision by SMSP, saying officials will bring all their help to carry out the decision.
The French state-owned company, Eramet, is going ahead with its legal challenge to the decision.
Eramet says the terms of the 1998 Bercy Accord haven't been respected.