Protests erupt in New Caledonia over proposed sale of major nickel plant

Tensions over the future of New Caledonia’s Vale nickel plant have erupted into violent protests on the streets of Noumea, with cars torched, shops vandalised and police and protestors injured in clashes.

Police fired teargas at protestors and arrested 12 people on Tuesday. Later in the week demonstrators were filmed carrying weapons behind torched roadblocks.

Debate over the sale of the plant - one New Caledonia’s largest - has become tightly bound up in the territory’s independence debate, since Brazilian owner Vale announced last year it wanted to sell.

Indigenous Kanak leaders and pro-independence parties have supported a bid led by local company Sofinor they say has been unfairly disregarded by the processing plant’s owners and the French government.

Late week, Vale announced it had signed a binding agreement to sell the operation to an international consortium, Prony Resources, which includes a 25% stake from controversial Swiss-based commodity trader Trafigura.

New Caledonia is one of the world’s largest nickel producers, and the industry is critical to the territory’s economy, employing thousands and accounting for the vast majority of its foreign earnings.

The Goro plant owned by Vale is the world’s fourth-largest nickel ore producer and a key economic driver for New Caledonia, employing 3000 people. But it has had a difficult history, benighted by protests, arson attacks and environmental damage. It has also struggled to make money for Vale, despite millions in investment.

Beyond the economics, the future ownership of the operation has become a proxy for New Caledonia’s long-running independence question: in October the territory voted narrowly - 53.3% to 46.7% - in favour of remaining a part of France.

But support for remaining a French territory is shrinking: an earlier referendum in 2018 broke 56.6%-43.3% for the loyalists, and observers say a slated third referendum in two years time could see the ‘oui’ vote for independence secure a majority.

Supporters of breaking away from France insist political independence should be married to economic autonomy, with the archipelago’s natural resources controlled by local interests.

A bid for the Goro plant by local company Sofinor, from the northern province of New Caledonia, in partnership with Korea Zinc Co, garnered support from pro-independence parties and Kanak customary leaders who argue majority ownership of the operation should rest with New Caledonians.

The bid, however, was twice rejected by Vale, and dismissed by the French overseas ministry, which recognised the Prony Resources consortium as the only viable option.

The dismissal of the Sofinor bid triggered weeks of protests, which escalated on Tuesday when Sofinor’s partner, Korea Zinc, pulled out, saying it couldn’t get access to the site to do its due diligence on the sale.

Videos posted to social media on Tuesday and Wednesday shows police firing teargas at protests and cars ablaze in the middle of streets blocking roads.

The Prony Resources includes a 50% holding by local stakeholders, including Vale staff, with 25% stake held by other undisclosed investors.

But it also includes a 25% stake held by Trafigura, a Swiss-based commodities trader investigated this year by US authorities for alleged corruption in oil trading. Trafigura has been linked to several high-profile scandals, including involvement in smuggling oil out of Saddam Hussein’s Iraq, and the dumping of toxic waste in the Ivory Coast, causing a public health crisis that affected more than 100,000 people.

“The people feel like they have not been seen or heard and this, coming after the referendum, is not a good sign. There is disorder and this could’ve been avoided,” one protestor told The Guardian. The French High Commission announced a four-day ban on people carrying weapons.

• This article was amended on 16 December 2020 to reflect that it is the Goro nickel processing plant that is the subject of the proposed sale, rather than the Goro mine as an earlier version indicated.