22 Mar 2005

French mining company raises concerns over nickel project in New Caledonia

10:26 pm on 22 March 2005

The French mining concern Eramet has asked for an independent technical study of the proposed nickel project in the north of New Caledonia.

AFP news agency reports that the planned joint venture of the local company SMSP and its Canadian partner Falconbridge is expected to be launched by the end of the year as a key undertaking to develop the economy of the territory's mainly Kanak north.

Eramet says a thorough study needs to be carried out to look into the viability of the so-called New Smelting Technology.

It also questions the profitability of the enterprise whose cost has been estimated to be about 2.7 billion US dollars.

Under a government-backed arrangement, Eramet will swap ore deposits with SMSP provided that 100 million dollars are committed by the end of this year to launch the project.

SMSP has now spoken out against Eramet's move, saying any extra cost will be set off by the high nickel prices.