15 Dec 2005

Company at heart of New Caledonia nickel project says a court case could jeopardise deal

3:45 pm on 15 December 2005

The company at the heart of a planned multi million dollar nickel mining project in New Caledonia says it's one step nearer to closing the deal.

But a pending court case in France could scupper the plans of Canadian company, Falconbridge, to meet it's end-of-the-month deadline on the Koniambo project.

The French state owned company Eramet, has filed a claim in the French courts alleging it has the rights to the deposit of ore which is at the heart of the Koniambo deal.

Koniambo has been touted as a means of revitalising the poor northern province, who's company SMSP is in partnership negotiations with Falconbridge.

Meanwhile, a general strike over France's stance on Koniambo has entered its fourth day.

The Kanak union USTKE says it wants France to back the Falconbridge/ SMSP partnership which would keep control of the project in local hands.

Falconbridge spokesman, Denis Couture says although the deal between them and SMSP has moved forward without the support of France, this court case could jeopardise everything.

"The most worrisome aspect is the lawsuit with Eramet because it is important for a mega project that we have clarity and we have said that we will defend ourselves vigorously and we will go to court to obtain that clarity and that finality which we require to invest the money."

Falconbridge spokesman, Denis Couture.