Home  About the project Project history
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The Koniambo Massif
The Koniambo Massif has been developed intermittently since the first concentrated ore extractions towards the end of the 1880s; used to supply the then brand new Société Le Nickel (SLN). The full potential of the Koniambo ore deposits, that could supply a world-class international resource development, has not been realised in the 20th century.
The rise of the SMSP
At the end of 1994, the SMSP’s production rose to double it’s volume of exportations, passing the cap of 2 million tonnes exported and thus allowing New Caledonian nickel to regain 50% of the Japanese and 66% of the Australian market. In 1995, the company exports the equivalent of 40,000 tonnes of nickel metal and 750 tonnes of cobalt per year.
Four years after the Northern Province bought the company back from Jacques Lafleur, the volume of exportation multiplied by seven. The SMSP group became the leading ore exporter in New Caledonia. The volume of its exportations ranks it seventh in the world for the production of oxidised ores. It’s activities created approximately 1,000 direct and indirect employments. The company’s mining activities are located in both the east and west coasts of the mainland.
The North Plant and Socio-Economic Rebalancing
First evoked in 1966 by the Général de Gaulle on his visit to New Caledonia, the construction of a second nickel plant in the Northern Province of the ‘Grande Terre’ (New Caledonian mainland) has for a long time remained an old New Caledonian myth. It is the dream of revenge of the ‘brousse’ (the bush) on the capital Noumea.
Conceived of as the only response to the excessive centralisation of New Caledonia around it’s capital Noumea (over half the country’s population reside in Noumea and it’s surrounding areas) the construction of the North Plant is also perceived by independence supporters as a fundamental step towards a tangible socio-economic rebalancing of the country’s Northern and Southern provinces.
In reality, mineral extraction on its own is insufficient to ensure the economic growth of the region and curtail the population’s urban migration to Nouméa. With it’s disperse centres (and transient by nature), the mining industry alone cannot create the urban pole necessary to establish the Northern Province’s own dynamic economy.
By creating 1,000 direct and 2,500 indirect and inferred employments during it’s operational phase, the realisation of a metallurgic plant will allow for the building of an ample economy in the Northern Province whist ensuring the creation of local employments in skilled trades already in existence (agriculture, fishing, cattle rearing, hotel business…). The achievement of such a project would also warrant the technical and social infrastructures likely to enable a sustainable and harmonious development of the area.
The Search for an Industrial Partner
From 1994, the economic success of the SMSP group reinforced the idea of its leaders, the elected members of the Northern Province and the FLNKS, that it was time to take the leap towards mineral conversion in the Northern Province.
In order to reach this objective the FLNKS and the SMSP, as early as 1994, proposed to conclude a partnership with the leaders of the SLN in view of the construction of a second metallurgical unit in New Caledonia. Faced with SLN’s refusal, the SMSP directed their search for a partner amongst the major international metallurgical corporations. Although mining know-how and resources are present in New Caledonia, no Caledonian miner possesses the technology and financial means necessary for metallurgical processing. The SMSP group finds in Falconbridge, also ranked third in the world, a mineral processor with proven technological expertise. Willing to establish co-enterprises with local partners, the Canadian giant confirms its interest in a joint venture with the SMSP group.
The Mining Preamble and the Bercy Accord
The SMSP and the FLNKS point out that in order to undertake such a project, it is necessary for them to dispose of mining resources capable of supporting the supply of a metallurgical plant comparable to Doniambo in the Southern Province. Only the SLN, since 1880, has such resources available but it’s leader, Yves Rimbaud, is not willing to part with them easily.
The leaders of the FLNKS were at the time in the middle of negotiations on the status succeeding the Matignon Accords. They set as preamble to all discussion of a consensual solution the making available of mining resources that would allow a project lead by SMSP and its partner to be carried out.The SMSP project is strongly supported by the major political parties in favour of independence, by the indigenous customary authorities and the larger union syndicates.
This part of the history, known as the ‘mining preamble’, was a main feature of current affairs from 1995-1997 and concludes, after many twists and turns, with the signing of the Bercy Agreement in February 1998 by the leaders of SMSP, ERAMET-SLN and the Finance Minister Dominique Strauss-Kahn.
The Bercy Accord was ratified in February 1998, a few months before the Nouméa Accord. It sets out the transfer of rights to the Koniambo ore deposits from the Société Le Nickel (SLN) to the Société Minière du Sud Pacifique (SMSP) and its industrial partner. The accord stipulates that the transfer must take place as soon as a probing feasibility study has been completed for a ferronickel project situated in the Northern Province, with a capacity of at least 54,000 tonnes of nickel per annum, and when a confirmed order of material for a total greater than 100 million USD has been effected.
The Koniambo Project
In April 1998, Falconbridge became the first official industrial partner of the SMSP as defined by the Bercy Accord. This agreement marks the beginning of the Koniambo Project. The accord stipulates that the SMSP holds 51% of the capital of the joint company. The SMSP brings to the table the Koniambo ore deposits, its professional expertise and local recognition. Its partner Falconbridge holds 49% of the capital, brings with it feasibility studies and takes responsibility for the financing of any future joint company. Talks begin about a project costing 1.5 billion US. The work of the joint company effectively commences in august 1998, with a surveying campaign that aims to provide a precise evaluation of the Koniambo nickel resources. A preliminary ‘framing study’ persuades the partners to invest in a comprehensive pre-feasibility study that will conclude in 2002.
Completed in December 2004, a Bankable Feasibility Study foresees a project cost of 2.2 billion USD. A section of this study consisted in outlining the financing modalities of the project by banking organisms. Work on the Bankable Feasibility Study also marked the entry of the co-company Hatch-Technip, who, in the contruction phase, became the holding syndicate of the IAGC (Ingénierie, Achat et Gestion de la Construction) contract.
In 2005, the Société par Actions Simplifiées (SAS) Koniambo Nickel is created and acquires the Koniambo mining stocks.
In Recent Times
From 2004, the surge in world prices of raw material led to a strong movement of concentration within the extractive industry. Falconbridge, recently absorbed by Noranda, became a target for various other companies wishing to increase their production capacity and financial base. From March 2005 to August 2006, INCO and XSTRATA battled for the buyout of Falconbridge, culminating in a successful takeover by XSTRATA.
XSTRATA Nickel decided that starting from September it will proceed in a ‘revitalization’ of the Koniambo project, which lasts almost a year and consists for the most part in a revision of construction costs sharply impacted by the surge in raw material prices and in a redefinition of the project’s execution strategy, with the closing down of the office in Brisbane, Australia and a concentration of the teams into two central locations: Kuala Lumpur in Malaysia and Koné in New Caledonia.
In October 2007, the board of directors of the respective partners came together to validate the final report on revitalisation; the implementation of the Koniambo project will require an investment of 3.8 billion USD jointly financed by the two partners.
Today, the Koniambo project’s construction team is fully mobilised, with the goal of Koniambo Nickel SAS entering production phase by the end of 2011.
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