"PARIS -- Before riots swept New Caledonia last week, French President Emmanuel Macron aimed to put the remote Pacific territory -- and its massive reserves of nickel -- at the center of France's push to secure raw materials for the clean-energy transition and compete against China in manufacturing electric vehicles.
Those plans are colliding with a hard-line local political movement that seeks independence from France and is refusing to go along.
The rioting exploded after lawmakers in Paris approved legislation to give more voting rights to New Caledonia's nonindigenous population, diluting the influence of the native Kanak people. At the same time, pro-independence parties are fighting a French proposal that would lift restrictions on exporting unprocessed nickel and give priority to shipments to European factories making electric-vehicle-batteries.
"Nickel is wealth for New Caledonia," Macron said on a trip there last year. "It is also, and I emphasize this, a major strategic resource for France and Europe, at a time when we have undertaken a massive reindustrialization effort."
Pro-independence leaders denounced the French plan when it was unveiled in March. Ronald Frere, a founding member of one of the pro-independence parties, called it a "colonial pact to regain control of New Caledonia's resources."
Six people have been killed and hundreds injured during the unrest. The rioting is a blow to what Paris calls its Indo-Pacific strategy -- its plans to use its overseas territories to counter the influence of China in the Indian Ocean and the Pacific. The vast region is home to some of the world's richest mineral deposits. Chinese companies have invested heavily in Indonesia's nickel sector, transforming the country into the world's largest producer of the metal and a major supplier to China's electric-vehicle factories.
French officials have responded with a plan to embrace New Caledonia and dilute the influence of the independence movement. "Questions of independence are questions of decades past," Macron said. "If independence means choosing tomorrow to have a Chinese base here or to be dependent on other fleets, good luck!"
The archipelago's residents have voted three times against independence from France, most recently in a 2021 referendum that was boycotted by pro-independence parties. Those votes preserved the status quo that gives New Caledonia significant autonomy and control over its nickel resources, which have long been the lifeblood of its economy.
New Caledonia is the world's third-largest producer of primary nickel, which includes raw ore and lightly processed forms of the metal. Demand has surged over the past two years because nickel is a critical material for clean-energy technologies, mainly lithium-ion batteries that power most of the world's electric vehicles. The International Energy Agency says demand for nickel in EV batteries will more than quadruple by 2030 as governments push consumers to buy electric vehicles.
But for now, New Caledonia's industry is in deep trouble. A surge of new production from Indonesia and a slump in the electric-vehicle industry have sent nickel prices plunging, down by nearly 40% since the start of 2023. The nickel industry now accounts, directly and indirectly, for roughly a quarter of the territory's jobs.
"The nickel market has worsened the overall economic environment," said Jean-Michel Sourisseau, a researcher at the French Agricultural Research Center for International Development, "and made the situation more delicate and explosive."" [1]
1. World News: Nickel Quest Underpins Riots --- France wants to lift export restrictions in New Caledonia to supply clean energy. Dalton, Matthew; Schechner, Sam. Wall Street Journal, Eastern edition; New York, N.Y.. 21 May 2024: A.18.
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