Inco closes Goro Nickel for a financial review - Kanak leaders call for opening negotiations

Inco closes Goro Nickel for a financial review - Kanak leaders call for opening negotiations

19 March, 2003 - For Immediate Release -

Comité Rheebu Nuu Senat Coutumier Suivi du Projet Goro Nickel

(Ottawa) After 100 years of mining and industrial exploitation in New Caledonia, the situation of the Kanak indigenous people has not improved. On the contrary, our living conditions have worsened in all areas where there is mining exploitation, past or present. No matter what the price of nickel may be (from US$ 2.30 to US$ 8.00/pound), the Kanak people never share in the benefits. What we are left with after mining is pollution of our land, of our bays, of our lagoon, of our coral reefs. The directly affected communities' concerns are never taken into account. For 100 years we have been told the same message: "you will get roads and employment."

After the launch of the Goro Nickel project, at the end of 2001, we noticed that INCO avoided legitimate concerns of Kanak communities by simply claiming to comply with the country's laws.

Raphael Mapou, Chairman of the Rheebu Nuu Committee, says, "The Kanak tribes living within the boundaries of the towns of Yate and Mont-Dore where the INCO project takes place, did not remain inactive and have pressured the company to take into account the Kanak cultural identity. Therefore, a big Kanak totem, representing the spirit of the ancestors and the totems of all chieftainships was erected last July on the Goro nickel mine site."

After 10 days of meetings and exchanges in Canada, our delegation has found that some Canadian aboriginal peoples and some mining companies we met during our visit have succeed in defining a framework for negotiations that takes into account the claims and interests of the indigenous peoples of Canada.

According to Georges Manadaoue, Senator, member of the Customary Senate, "From our point of view, these negotiations between mining companies and native peoples in Canada are encouraging for all Indigenous Peoples who suffer under the relentless spread of globalisation, exploitation and profit making by multinational corporations. We do not understand why INCO adopts in New Caledonia a colonial attitude, denying the rights and interests of the Kanak people, although these rights and interests have been enshrined in the Noumea Accord".

Raphael Mapou adds, "The similarities between our situation and those of Canadian indigenous people's, which INCO knows well, should have led INCO to seek a better relationship with us than has been the case. We have discovered that:

According to experts, the nickel commodity price on the world market should remain much higher than 4US$/pound during the next 3 years; Yet indications given us by INCO's management show that the resuming of the Goro Nickel plant construction is not foreseen in the near future.

We denounce INCO's attitude. After INCO, obtained from Government authorities an exceptional tax reduction regime and the granting for free of the neighbouring Prony nickel deposit, INCO decided purely and simply to stop the GORO plant construction without any consideration for the workers, the contractors and the people of New-Caledonia."

Rock Wamytan, High Chief of the St Louis tribe and Minister for Customary Affairs in the Government of New Caledonia, shares this view, "We call upon INCO management to engage resolutely and clearly into negotiations with the Rheebu Nuu Committee and with the Customary Senate, in the spirit of what has been done in Canada. The objectives we want to reach together with INCO must allow and guarantee a sustainable development and succeed in a real benefit sharing between INCO and New-Caledonia. This represents the realisation of the spirit and the letter of the Noumea Accord that the Canadian mining company cannot over turn."

Adds Raphael Mapou, "Without such cooperation, there will no further development in GORO or in PRONY."

Comité RHEEBU NUU SENAT COUTUMIER Suivi du Projet Goro Nickel
68 Av. James Cook,
Nouville Mairie de Yaté
98845 Nouméa Cédex
Nouvelle-Calédonie

B.P.1059,
98834 Yaté,
Nouvelle Calédonie

Background information

New-Caledonia is an archipelago situated 1,800 km East of Australia and 2,200 km North of New Zealand. With a land mass of 19,000 km2, its Economic Exclusive Zone is 1,700,000 km2. La Grande Terre (the big island) the main island, 400 km long and 60 km wide, has the biggest nickel deposit in the world and has great richness in natural resources.

The Indigenous People is the Kanak people, belonging to the Melanesian peopling arc of the South Pacific (Papua New-Guinea, Solomon Islands, New-Caledonia, Vanuatu and Fidji Islands). Today the Kanak people represent 47% of the total population of 200,000.

In 1853, France took possession of New Caledonia which today is part of the French Overseas Territories. Since the signing of the Matignon Accord in 1988 and the Noumea Accord in 1998, the territory benefits from a special status which will end in a 15 to 20 year term with a referendum on self-determination.

These accords, signed after a long struggle by the Kanak people, signed between the FLNKS pro-independence from France on one hand and France and the pro-France RPCR party on the other, give New Caledonia the powers of an autonomous Government, France is keeping power over Justice, Defence, Security and Money.

New-Caledonia is divided into three provinces the Northern Province and the Loyalty Island Province with a majority of Kanak population and the Southern Province with a majority of European population. Each Province has the control over its natural resources.

a.. In 1991 INCO buys for US$ 25 millions the mining titles for the Goro deposit (Southern Province) evaluated to 400 million tonnes of ore/6 million tons of metal Ni.

b.. In 2000, INCO announces the construction of a plant using the High Pressure Acid Leach of a production capacity of 55,000 tons of nickel and 5,000 tons of cobalt. This project will be granted by the Government of New Caledonia a full tax cut over a period of 15 years, plus a tax reduction of 50% over the following 5 years. France will also grant a tax cut on investment equivalent to US$350 million;

c.. Second half of 2001, launching of the first contracts and works;

d.. First half 2002, signature between INCO and the BTH Consortium (Bechtel, Tecnip and Hatch) of a contract for the engineering and the construction of the plant for a total cost of US$ 1.45 billion with an opening planned for 2004. Beginning of gigantic major earthmoving works.

e.. July 2002, INCO is granted for free the deposit of Prony (neighbour to Goro) with an estimated 4 million tons of metal nickel contained.

f.. September 2002, due to a first review of the construction increasing to US$1.7 billion, INCO and BTH decide on a first stoppage of the construction works that will last 2 months.

g.. December 2002, BTH announces a new re-evaluation estimated to US$2.1 billion. Toronto decides on a new stoppage of 6 months.

h.. End of February 2003, closing of the Goro Nickel mining site. Trade Union organisations start actions.

i.. March 8 to March 20, 2003, a delegation of the Rheebu Nuu monitoring Committee and members of the Customary Senate visit Canada.