1 Aug 2006

Uncertainty over future of New Caledonia nickel project

10:28 am on 1 August 2006

There is concern in New Caledonia that the two billion US dollar nickel project in territory's north may be in jeopardy.

The uncertainty comes after a planned merger between the project's foreign partner, Falconbridge of Canada, and Inco of Canada has been called off.

Swiss-based Xstrata is vying to control Falconbridge and may then shift its focus away from the nickel project.

The so-called northern project has been a key element in the government's attempt to develop the territory's mainly Kanak north.

New Caledonia's mining minister, Didier Leroux, says many questions remain.

"If the partnership is changed it will mean at least a two year delay in starting the building of the plant. But the things are not totally done and there is still hope the project as it is could go ahead. I don't know yet."