The current strategy of the nickel sector in New Caledonia raises questions
An audit of the General Inspectorate of Finance (IGF) and the General Council of the Economy (CGE), made public on August 1, questions the strategy concerning nickel. Despite the importance of this key element in the manufacture of batteries for electric vehicles, the current policy does not allow the companies that exploit it to achieve profitability.
While nickel is one of the strategic metals most in demand on world markets, the three companies that produce it in New Caledonia (Société le Nickel / SLN, Koniambo Nickel SAS and Prony) have suffered losses for twelve years. , according to the report from early August.
For the record, on average, an electric battery contains 50 kilos of nickel, 45 kilos of lithium and 7 kilos of cobalt.
Several work meetings in Bercy
“Several working meetings at the technical level with the various stakeholders on the subject of nickel” will be held “in Bercy this week” and this from Monday, the ministry said.
Stated objective: “try to implement the guidelines given” by Emmanuel Macron during his trip to Noumea at the end of July.
As a reminder, during his visit, the Head of State had promised a “nickel project for the future” in order to allow the factories which exploit this ore to achieve profitability. And this, in particular via state funding allowing an “overhaul of the energy sector” in order to provide “competitive” and “carbon-free” electricity.
Increase production and reduce costs
According to the report, in order to become profitable, the 3 companies in the sector present in New Caledonia – Société le Nickel / SLN, Koniambo Nickel SAS and Prony – must be able to increase the production of their factories in order to reach their nominal capacity while reducing their costs at the same time. Which turn out to be high compared to those of the international competition. The report also recommends the conversion of activity of two ferronickel production plants – mainly used in stainless alloys – to direct them towards the production of nickel usable in batteries.
Another major point for improvement: the sector’s energy consumption. At present, the energy used by New Caledonian manufacturers is particularly carbon-intensive and represents a cost that is much higher than the production units of their competitors in Indonesia.
The necessary investments are estimated at 4.15 billion euros for the conversion of the two existing coal-fired power plants into gas-fired power plants, the development of photovoltaic energy, storage via batteries and energy transfer stations by pumping .
During his visit to Nouméa at the end of July, Emmmanuel Macron recognized that this strategy imposed costly solutions which could only be borne by the State.
Contradictory element: nickel is supposed to help create a sustainable and less polluting society. However, its extraction, its transformation and the manufacture of batteries dedicated to electric vehicles are very energy-intensive.
In 2020, according to estimates by the US Geological Survey, the world’s nickel reserves were 94 million tons. Currently, the nickel market is 2.5 million tons. In 2050, it should reach 10 million tons.
Also in 2020, the production of electric vehicle batteries consumed 200,000 tonnes of nickel. . According to Transport & Environment, in 2023, the nickel resources at our disposal would make it possible to produce 14 million electric vehicles.
Our opinion, by leblogauto.com
New Caledonia has to face competition from Indonesia. Last July, the Indonesian authorities and those of the State of Western Australia signed an agreement to jointly exploit two minerals essential to the manufacture of batteries for electric vehicles: nickel and lithium. According to the local press, this partnership should boost the economic relations, hitherto cautious, between these two neighbors.
Indonesia doesn’t have lithium, but it does have nickel. As such, the agreement which was signed on Tuesday 4th July 2023 between the Western Australian State Government and the Indonesian Chamber of Commerce and Industry (Kandin) on the development and processing of these two critical minerals is highly strategic.
With its abundant nickel resources, i.e. 22% of planetary reserves and 37% of world production, as well as a large cheap labor force, Indonesia aims to become a regional center of battery production. and electric cars.
The New Caledonian nickel sector must react to remain both competitive and profitable.
Still, the sector’s immense energy needs are debated: Indonesia is home to an industrial park comprising no less than 24 foundries topped by half a dozen cranes. Located in Morowali, it is intended for the nickel industry and its derivatives. However, nickel pig iron is extremely energy-intensive: the country is a major consumer of fossil fuels (coal represents 60% of the energy mix).
Did you say environmentally friendly electric vehicles?