New Caledonia, which this week allowed Brazil's Vale to restart its nickel operations after an acid spill and subsequent riot, is not open to new mining plants, having reached maximum capacity, an influential and newly-elected local government official told Reuters on Wednesday.
Philippe Michel, president of New Caledonia's key economic Southern Province, also said the South Pacific island must plan for a future without nickel mines and will introduce an export tax linked to the price of nickel to create a future fund. New Caledonia, off northeastern Australia, holds as much as a quarter of the world's known nickel reserves and employs more than 6,000 people in processing the ore. Nickel mining is a key industry in the French-run territory, accounting for around 20 percent of its economic output, according to government figures.
"With already three plants, we've reached our limit of what we can cope with, whether it is economically, socially, culturally or environmentally," Michel told Reuters in a telephone interview. The three plants are operated by Brazil-giant Vale, French-owned Societe Le Nickel (SLN) and UK-listed Glencore. The New Caledonian government's long-term strategy is to prepare for a "post-nickel" economy with the expansion of the island's tourism activities, said Michel.
A new mining export tax, which will help fund future economic growth, maybe in place later this year. Michel, who was elected last month as head of one of New Caledonia's three provinces, said his priority was to fix the damage caused to the environment by 130 years of mining. Just last month, the local government suspended Vale's operations at the $6 billion processing plant in Goro after some 100,000 litres of acid-tainted effluent leaked, killing about 1,000 fish. It was the sixth major incident at the site for the world's second-largest nickel miner, and it sparked violent riots that caused more than $20 million in damage to buildings, equipment and vehicles.
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