In New Caledonia, the future of nickel hangs on the energy question

While the prices of strategic raw materials like nickel are soaring on world markets, the three Caledonian nickel refining plants are weighed down and threatened in their survival by their production costs and their lack of competitiveness, according to an official report published in August .

All the players in the sector, elected independentists and loyalists, industrialists and administrations, met this week to try to "create a common vision" and a "new model" around nickel, according to a government source. In order to avoid an industrial crash.

“The main issue for the future of the New Caledonian nickel sector is that of energy,” a member of the cabinet of the Minister of Energy Transition, Agnès Pannier-Runacher, who participated in the meetings, told AFP. We must reduce the exorbitant energy bills of factories. “It’s a survival issue,” adds an industrial source.

The extraction and refining of nickel, the island's main resource, consumes "75 to 80% of the electricity consumed on the territory". And the energy costs of the three factories "can be twice those of their Indonesian competitors", specifies the report from the General Council of the Economy and the General Inspectorate of Finance.

“Extraordinary potential”

However, the "pebble", nickname of the archipelago, has no infrastructure allowing it to produce energy at low cost. With the exception of the Yaté dam which represents less than 10% of its total consumption, electricity depends mainly on imported coal or oil.

Part of the discussions focused on ways to develop new autonomous sources of electricity, but also on the need to produce green electricity allowing the sector to decarbonize and comply with European climate objectives. , we summarized from a government source.

“The meetings moved things forward on both subjects. Decarbonization was not necessarily a priority for everyone a few weeks ago,” notes a participant who does not wish to be identified.

Ultimately, according to the plan discussed, New Caledonia could move to 70% renewable energy production "by betting on its extraordinary sunshine potential and its land potential", and would keep 30% of energy from thermal power plants. to imported gas, he added.

But for the three factories to hope to become profitable, an investment of 4 billion euros would be necessary to create two pumped energy transfer stations (STEP), according to the New Caledonian network manager Enercal.

Store energy

These dam-like infrastructures are intended to store -intermittent- photovoltaic energy so that it can be used when needed.

One would be built in the north of the island to supply the KNS Koniambo factory, 51% owned by a public shareholder and 49% by the Glencore trading group.

The second would go south, into the Tontouta valley, to supply the factory of Société Le Nickel (SLN) in Nouméa, whose majority shareholder is the Eramet group, and that of Prony Resources (PRNC), at the southern tip of the island, in which the Trafigura trading group owns 19% of the capital.

Before signing a check, the French State will have this plan and the amount of the invoice assessed in the coming months by the Energy Regulatory Commission (CRE), indicates the Energy Transition Cabinet.

Only the Prony Resources factory produces class 1 nickel, suitable for batteries. She signed a high-profile contract with Tesla.

For the other two, which produce class 2 nickel intended for the manufacture of stainless steel, to enter the battery market, they also need investments, estimated at 250 million euros for the northern factory. and 20 million euros for that of the SLN, according to the office of the Minister of Industry Roland Lescure.

A new meeting of the nickel working group should take place “before the end of the year”.