Nickel from New Caledonia: a highly sought-after metal [2021]

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The third and final referendum in New Caledonia on December 13, 2021, was closely followed by France due to the territory’s future status as either a territorial collectivity or an independent state. However, this vote was also closely monitored by various global public and private actors.The New Caledonian archipelago draws significant international attention for two main reasons. The first is its strategic geographic position in the South Pacific, where China’s growing influence has heightened concerns among regional powers such as Australia and New Zealand, allies of the United States (as evidenced by the official announcement of the AUKUS military alliance on September 15, 2021). The second, and the focus of this analysis, is its mineral wealth, particularly its substantial nickel deposits, which dominate its resource extraction industry.

Nickel is a critical resource in the global energy transition, as outlined by the signatories of the Kyoto Protocol (1997), reinforced by the Paris Climate Agreement (2015), and at a regional level through the European Green Deal (2019). Electric vehicles, whether powered by batteries or fuel cells (also known as hydrogen vehicles), rely on nickel (Ni, atomic number 28), a ferromagnetic metal that is an excellent conductor of electricity and highly ductile (capable of being worked without losing its physicochemical properties). Nickel is used primarily in the cathode of lithium-nickel-cobalt-aluminum (NCA) batteries, produced mainly by the Japanese electronics company Panasonic and its American industrial partner, Tesla. On average, electric vehicles contain 30 to 40 kilograms of nickel, a significant amount that underscores the metal’s critical role in modern mobility. This role is further amplified as technological advancements increasingly favor nickel over cobalt, as seen in the rise of nickel-manganese-cobalt (NMC) batteries, which use up to 80% nickel, 10% cobalt, and 10% manganese. These batteries offer better cost efficiency, reduced weight, and comparable energy density to NCA competitors. These qualities have sharpened the interest of major players in the mining and industrial sectors.


Tesla, the iconic Texas-based electric vehicle manufacturer, has become highly active in the mineral resources market, with nickel supply being a top priority. The company has secured logistical access to this resource through agreements with the world’s leading nickel producer, Indonesia (followed by the Philippines and Russia as the second and third largest producers in 2020, respectively). However, Tesla has also diversified its suppliers, including New Caledonia. According to the CFO of Prony Resources, a contract spanning five to seven years (likely with a two-year tacit renewal clause) accounts for approximately one-quarter of the mining company’s exports. This choice is particularly justified given New Caledonia’s rapid rise to the world’s fourth-largest nickel producer, with extraction capacity increasing significantly from 59,100 tonnes in 2015 to 200,000 tonnes in 2020.

The mining sector is highly sensitive in this South Pacific territory, as demonstrated by recent unrest involving Vale NC (a subsidiary of the Brazilian group Vale), including blockades and production halts in the south of the main island, as well as threats by the Swiss group Glencore to withdraw from the north due to repeated operational issues at the politically strategic Koniambo Nickel SAS site (51% owned by Sofinor, a mixed-economy company in the northern province of the island). The sector’s socioeconomic importance is underscored by its employment of nearly a quarter of the private sector workforce.

As shown in the referenced chart, the price of nickel has steadily risen, reaching $21,130 per tonne in November 2021, compared to a low of $8,770 per tonne in June 2017. Barring the discovery of a new technology or resource with similar physicochemical properties, it is unlikely that demand for nickel will decrease significantly in the coming years. This is corroborated by projections from the International Energy Agency, which anticipates sustained growth driven by the energy transition in its scenarios for 2030 and 2040. This makes New Caledonia’s nickel deposits all the more attractive to stakeholders in the energy transition.

The mining issue is further complicated by geopolitical dynamics. While Indonesia is the world’s leading nickel producer, China dominates its processing through several smelters, including the highly active Zhejiang Huayou Cobalt conglomerate (nickel and cobalt share similar physicochemical properties). China’s need for raw materials to fuel its advanced technology industries, including electric batteries and various alloys like nichrome, has driven it to seek influence in mineral-rich regions worldwide. Its persistence is notable: for instance, when Indonesia banned nickel exports in January 2020 to prioritize domestic processing industries, the decision provoked objections from the European Union but did not deter the Chinese firm Tsingshan from investing in a local processing plant.

Following China’s systemic approach, where state authorities and powerful firms work in tandem, New Caledonia presents a clear opportunity for financial and structural investment, as seen in the Solomon Islands, Vanuatu, and Papua New Guinea. Under Xi Jinping’s leadership, China pursues an assertive commercial and military strategy, advancing its interests where regional powers retreat. New Caledonia’s mineral resources and its deep-water port in Nouméa make it a valuable asset, particularly as part of China’s “string of pearls” strategy in the face of opposition from Australia and New Zealand, which openly challenge China’s regional ambitions. Australia, the world’s fifth-largest nickel producer, has shown keen interest in New Caledonia, particularly in supporting the growing independence movement to expand its own production capacity through targeted partnerships. New Zealand’s relations with France, however, remain strained due to the 1985 Rainbow Warrior incident, despite official apologies and financial compensation for the violation of New Zealand’s sovereignty.

As Antoine-Louis de Prémonville notes in an analysis published in Revue Conflits, New Caledonia remains a unique French asset in a region shaped by Anglo-Saxon and Chinese influence, lending it a distinctive role in the geopolitical “Great Game” in the Pacific, where mineral wealth is as critical as geographic positioning.




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