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Building a mining policy for New-Caledonia
Mining in the Pacific conference – NouméaNovember 23, 2011
Analysis of the 2009 Mining development plan and 2011 Industrial plan
AurAuréélienlien Louis Louis -- Mining in the Pacific conferenceMining in the Pacific conference
Speaker
• Aurélien Louis
• Born 8th of july 1981
• Head of DIMENC, the administration in charge of mining, industrial environnement and energy policy in New Caledonia
• Chief executive of the Fonds Nickel, public fund devoted to providing financial support to the mining sector in times of crisis and mines rehabilitations
• High Commissioner advisor for industrial matters
• Ecole Polytechnique (2001), Télécom Paristech (2006), Ingénieur des Mines (2006)
• aurelien.louis@gouv.nc
The DIMENC
• Control of SEVESO and IPPC installation
• Pressure equipment control, explosive
• Dam safety
• Air pollution
Department for Department for IIndustry, ndustry, MMining and ining and EEnergy of New nergy of New CaledoniaCaledonia
IIndustryndustry10 agents10 agents
45 controls / year45 controls / year
• Mining permits
• Mining exploitation control• Mining export control
• Data collecting
MMiningining11 agents11 agents
110 controls / year110 controls / year
• Electricity and gas price setting and control
• Rural electrification funding
• Renewable energy and energy efficiency policy
EEnergynergy
9 agents9 agents
1000 MF / year for 1000 MF / year for energy efficiency energy efficiency and rural and rural elecelec
+ 1 laboratory and 1 geological survey+ 1 laboratory and 1 geological survey
Agenda
• The place of NC in the global mining and metal industry
• Building a mining policy for New Caledonia –the mining development plan and the mining code
The place of NC in the global mining and metal industry
New caledonia has highly valued, critical, mineralresources ; Nickel is the main one
Cobalt :Cobalt :
~500 T/~500 T/yearyear (Sandouville)(Sandouville)
5000 T/5000 T/yearyear (Vale NC)(Vale NC)
Nickel :Nickel :
180 000 T/180 000 T/yearyear (SLN, KNS, Vale)(SLN, KNS, Vale)
~60 000 T/~60 000 T/yearyear ((JapanJapan , , AustraliaAustralia ))
ChromiumChromium : : projectsprojects
Source : Critical raw materials for the EU, report of the WG, 20Source : Critical raw materials for the EU, report of the WG, 201010
Nickel : a metal with multiple uses
Stainless Steel; 65%
Nickel-based alloys; 12%
Electroplating; 10%
Alloy steel; 8%Other; 1%
Coins; 1%Battery; 3%
Source : Source : ErametEramet
Who buys nickel ? (1/2)
Who buys nickel ? (2/2)
NC : a mid scale player getting big
World Reserve : 71 000 kTWorld Reserve : 71 000 kTWorld Reserve : 71 000 kTSource : DIMENC, USGSSource : DIMENC, USGS
0%
5%
10%
15%
20%
25%
Russia
China
Austra
lia
Canada
Indo
nesia
CubaNew C
aledon
ia
Brazil
Philipi
nes
Metal production
Mine production
As of 2009 ; % of world total of Ni content ; metal production :As of 2009 ; % of world total of Ni content ; metal production : primary and intermediate Niprimary and intermediate Ni
20152015
Vale + 60 kT/anVale + 60 Vale + 60 kTkT/an/an
KNS + 60 kT/anKNS + 60 KNS + 60 kTkT/an/an
Various + 100 kT/anVarious + 100 Various + 100 kTkT/an/an
Ambatovy + 60 kT/anAmbatovyAmbatovy + 60 + 60 kTkT/an/an
Munali + 8,5 kT/anMunaliMunali + 8,5 + 8,5 kTkT/an/an
Various + 140 kT/anVarious + 140 Various + 140 kTkT/an/an
Talvivaara + 33 kT/anTalvivaaraTalvivaara + 33 + 33 kTkT/an/an
Caldag + 20 kT/anCaldagCaldag + 20 + 20 kTkT/an/an
Ramu + 30 kT/anRamuRamu + 30 + 30 kTkT/an/an
The major players in the nickel industry have variouskind of interests in New Caledonia
0%
5%
10%
15%
20%
25%
Norilsk Nickel Vale Jinchuan BHP Billiton Xstrata Sumito moMetal Mining
Eramet Pamco
Source : INSG, Source : INSG, ObsObs NicoNico 20102010
Nickel Nickel producersproducers
Nickel ore clientsNickel ore clients
Commercial Commercial interestsinterests
A key business in NC : a few facts and figures
0
100 000
200 000
300 000
400 000
500 000
600 000
700 000
In M
F C
FP
Agriculture
Banking and Insurance
Transport &CommunicationOther industry(including energy)Building sector
Trade
Nickel Industry
Public Service
Service industry (other)
ShareShare of nickel of nickel industryindustry in NC in NC AddedAdded ValueValue
12 %12 %
ContrbutionContrbution to to growthgrowth
25 %25 % of NC growth of NC growth between 98 and 06 was between 98 and 06 was due to the nickel sectordue to the nickel sector
JobsJobs ((privateprivate sectorsector))
More than More than 1 out of 61 out of 6private job in NC will be private job in NC will be
due to nickel in 2014due to nickel in 2014
Source : ISEE, DIMENCSource : ISEE, DIMENC
AddedAdded value in 2014value in 2014
Estimated Estimated 2 000 M$2 000 M$
As of 2006As of 20060
100 000
200 000
300 000
400 000
500 000
600 000
700 000
En
MF
CF
P
Nickel
Autres
ShareShare of nickel of nickel productsproducts in global export in global export (2000(2000--2010)2010)
92 %92 %
Geography and economics of Ni mining in NC
Source : DIMENC (2010)Source : DIMENC (2010)
Gwanyang, Korea : 1,4 Mth (17%)GwanyangGwanyang , Korea : 1,4 , Korea : 1,4 MthMth (17%)(17%)
Doniambo : ~ 3,8 Mth (46%)DoniamboDoniambo : ~ 3,8 : ~ 3,8 MthMth (46%)(46%)
Japan : 0,8 Mth (10%)Japan : 0,8 Japan : 0,8 MthMth (10%)(10%)
Yabulu, Australia: 2,3 Mth (28%)YabuluYabulu , Australia: 2,3 , Australia: 2,3 MthMth (28%)(28%)
Goro : 60 000 T Ni GoroGoro : 60 000 T Ni : 60 000 T Ni
KNS : 60 000 T Ni KNS : 60 000 T Ni KNS : 60 000 T Ni
Two world class mining projects
The Goro project :
– 69% Vale Inco, 21% Sumitomo/Mitsui, 10% SPMSC (NC and provinces)
– Hydrometalurgy– Capacity : 60 000 tons/year nickel and 5
000 tons/year cobalt– Project cost : 4 billion US$
Ni oxyde production by 2012
Stage :Tests on one production line by the end of the year
Two world class mining projects
The Koniambo project :
– 51% SMSP et 49% Xstrata Nickel– Pyrometallurgy– Capacity : 60 000 tons/year nickel– Project cost : 5 billions US$– Start of production by 2012
• Stage :– Factory modules being assembled
A century long history
1969 1969 -- 19731973 19901990
First environmental techniquesFirst environmental techniquesFirst environmental techniques
Mining “boom”Mining Mining ““boomboom””
Modern times Modern times
FromFrom 4% Ni to 2,5% Ni4% Ni to 2,5% Ni
200920092004 2004 -- 20082008The 21st The 21st centurycentury
FromFrom 2,5% Ni to ?% Ni2,5% Ni to ?% Ni
Mining development plan and codeMining development plan and codeMining development plan and code
Two major nickel projects launched + Posco deal
Two major nickel projects launched + Two major nickel projects launched + PoscoPosco dealdeal
Local ownership development policy : SLN - SMSP
Local ownership development policy : Local ownership development policy : SLN SLN -- SMSPSMSP
18641864 18731873 19111911 19501950
Discovery of nickel by Jules GarnierDiscovery of nickel by Jules Discovery of nickel by Jules GarnierGarnier
First mine opened in Mont Dore First mine opened in Mont Dore First mine opened in Mont Dore
Doniambo factory starts producingDoniamboDoniambo factory starts producingfactory starts producing
OldOld fashionfashion miningmining periodperiod
FromFrom 15% Ni to 4% Ni15% Ni to 4% Ni
The need for an explicit and coherent mining policy
• NC mining sector has developed at a swiftpace for the past 20 years :
– From the backyard of the Société Le Nickel to a center piece of the international nickel industry
– A massive local industrialization, with two major giant projects on their way to production
– Innovative partnerships put in place (Posco)
• Mining as a component of NC emancipation process– Accord de Matignon – SMSP sold to North Province– Accord de Nouméa – The three Provinces in the capital of
SLN (STCPI)
• The growing need for sustainable development
OrganicOrganic Law, March 1999, Article 39 : A Law, March 1999, Article 39 : A miningmining developmentdevelopmentplan for a plan for a sustainablesustainable developmentdevelopment policypolicy of the of the miningmining sectorsector
The mining development plan and mining code of NC
The mining scheme : a diagnostic and an action plan
• 5 main topics– Streamlining mining regulation– Towards a better knowledge of the mineral resources – Protecting the environment and promoting better
practices to maintain biodiversity– Increasing local companies competitiveness and
climbing up the value chain– Ensuring that mining projects benefit to communities and
future generations
• A framework for all future mining developments : any individual decision taken within the framework of the mining law must be in agreement with the basic principles and guidelines of the Mining Development Plan
• A difficult validation process : first drafts issued in 2004 ; final version passed the congress only in 2009
http://www.dimenc.gouv.nc/portal/page/portal/dimenc/librairie/fihttp://www.dimenc.gouv.nc/portal/page/portal/dimenc/librairie/fichiers/schema_mise_en_vchiers/schema_mise_en_valeur_des%20richesses_minieresaleur_des%20richesses_minieres--mai_2009.pdfmai_2009.pdf
53%
16%
13%
8%
4%4% 2%
SLN
Ballande
NMC
Vale
SMGM
KNS
Autres
Getting a better knowledge of the mining potential of NC
• A low level knowledge of NC mineral resources
• Although extensive permiting has taken place in the past
• Resulting in a lack of new development opportunities and no global resources development plan
49 % of the surface of valid mining titles total surface has not been thoroughly drilled
49 % of the surface of valid mining titles total 49 % of the surface of valid mining titles total surface has not been thoroughly drilledsurface has not been thoroughly drilled
70 % of the peridodite surface is covered by a minin g permit
50 permit holders, for only 6 active companies
70 % of the 70 % of the peridoditeperidodite surface is covered by a mining permitsurface is covered by a mining permit
50 permit holders, for only 6 active companies50 permit holders, for only 6 active companiesRelative Relative shareshare of the total of the total permit surfacepermit surface
Gathering existing data to complete mineral resourc es estimationGathering existing data to complete mineral resourc es estimation
Setting a time limit to perform exploration on exis ting permits Setting a time limit to perform exploration on exis ting permits and and enforce individual resources exploitation planenforce individual resources exploitation plan
Facilitating exploration works licensing when done with competitFacilitating exploration works licensing when done with competitive ive environmental techniquesenvironmental techniques
Building a NC geological survey, to encourage increased investmeBuilding a NC geological survey, to encourage increased investments nts (hydrocarbon in the EEZ (hydrocarbon in the EEZ –– geology of limonite resources)geology of limonite resources)
DoneDone
DoneDone
DoneDone
DoneDone
Getting a better knowledge of the mining potential of NC
The nickel ressources assesment : first results (1/3)
6Supérieure à 140 m
18De 80 m à 140 m
34De 60 m centrée à 80 m
42Inférieure à 60 m centrée
% de sondagesLongueur de maille
The nickel ressources assesment : first results (2/3)
The nickel ressources assesment : first results (3/3)
Protecting the environment and promoting better practice s to maintain biodiversity
• Public awareness of the risks associated with environmental abestos fibers
• A renewed political engagement to preserve NC unique environement (environment code adopted in 2009 – coral reef included in world Heritage list)
Estimated 20 000 ha have been impacted by mining activities (~3,6% of peridotite surface)
Estimated 20 000 ha have been impacted by Estimated 20 000 ha have been impacted by mining activities (~3,6% of mining activities (~3,6% of peridotiteperidotite surface)surface)
• Since the 50’s, mechanization of mining operations and old fashion mining techniques has brought significant pollutions
• Lowering Ni grades lead to abandonnedmines without adequate closing work done
Protecting the environment and promoting better practices to maintain biodiversity
New authorization procedure for mining works, invol ving public New authorization procedure for mining works, invol ving public enquiry, environmental and socioenquiry, environmental and socio --econonomicecononomic studies, a special studies, a special administrative police, financial guarantees for env ironmental woadministrative police, financial guarantees for env ironmental wo rksrks
A Code of best practice, to be signed by the entire professionA Code of best practice, to be signed by the entire profession
Increasing NC knowledge of mining activities impact on the Increasing NC knowledge of mining activities impact on the environementenvironementthrough the CNRT through the CNRT ““ Nickel et son Nickel et son environnementenvironnement ””
Workers protection regulation against Workers protection regulation against abestosabestos fibers fibers –– Best practices sharing Best practices sharing encouraged within the mining sectorencouraged within the mining sector
Creation of a fund devoted to financing mines rehab ilitation (Creation of a fund devoted to financing mines rehab ilitation ( FondsFondsNickel)Nickel)
DoneDone
DoneDone
DoneDone
DoneDone
DoneDone
YATE
THIO
VOH
POYA
PAITA
BOURAIL
HOUAILOU
HIENGHENE
LA FOA
KONE
POINDIMIE
KOUMAC
BOULOUPARIS
CANALA
POUEMBOUTPONERIHOUEN
OUEGOA
POUM
MONT DORE
KAALA GOMEN
TOUHO
KOUAOUA
MOINDOU
DUMBEA
POUEBO
LIFOU
OUVEA
LIFOU
SARRAMEAFARINO
NOUMEA
POUM
MONT DORE
OUVEA
NOUMEA
The Fonds Nickel : a public fund devoted to mines rehabilitation
Top priority sitesTop priority sites
• A GIS covering around 454 old mines
• A ranking system, according to environmental impact or rehabilitation economic interest
• 66 will be financed by mining operators (sites abandonned after 1975)
• 166 with a 20% private participation (sites located on a mining concession)
• 62 with only public funds
• When possible, sites re-exploitation will be preferred
First hands-on experience
12/200912/2009 30/07/201030/07/2010
Towards a sustainable industrial development
• NC is a long time exporter of Nickel ore (2,3 MT Ni since the 19th c.)
• Two world class mining projects and new forms of partnerships with potential clients => a new awareness of the necessity to increase local added-value of the mining & metal business
• But an old fashion regulation of exports and no tools to preserve resource for future local met development
A new regulatory framework for ore exportA new regulatory framework for ore export
A legislative framework to secure resources, for fu ture metallurA legislative framework to secure resources, for fu ture metallur gic gic development (development ( rrééservesserves ggééographiquesographiques mméétallurgiquestallurgiques et et rrééservesservestechniques techniques provincialesprovinciales ))
Creation of the Creation of the «« ObservatoireObservatoire du nickel et du cobaltdu nickel et du cobalt »»
DoneDone
DoneDone
DoneDone
Towards a sustainable industrial development
Ensuring that mining projects benefit to communities and future generations
• The construction phase of Goro and KNS project has shown the impact of big projects on local communities
– The need for public information and discussion– The question of the employment
• The local economy too much dependent on the mining sector and the mining sector dependent on global mineral resources economic situation
SocioSocio --economic impact studies as part of the authorizatio n processeconomic impact studies as part of the authorizatio n process
Creation of local information commissions (CLI)Creation of local information commissions (CLI)
Using a public fund, the Using a public fund, the FondsFonds Nickel, to preserve mining jobs in times of Nickel, to preserve mining jobs in times of crisiscrisis
Creation of a sovereign fund, le Creation of a sovereign fund, le FondsFonds Nickel pour les Nickel pour les ggéénnéérationsrations futuresfutures
DoneDone
DoneDone
PendingPending
DoneDone
The mining development plan and beyond
• The main tools have been put in place :– A mining code, including a new regulation for ore export– The creation of the Fonds Nickel et the preparation of a rehabilitation program– The first call for projects of the CNRT “Nickel et son environnement”– The observatoire du nickel et du cobalt– The mineral resources assesment
• The quality of the mining plan should be reviewed on the long term– The period between 2012 and 2015 will be critical
• But some questions have been left open or need to be further explored
The industrial development plan
• The preparation of an industrial development plan has been decided by the comitédes signataires, with the goal to complement the mining development plan
• A industrial strategic committee has been put in place, with the contribution of the French state
• The main questions :– The contribution of the mining business to the fiscal resources of NC ; the creation of a
sovereign fund– The exploitation pace and the export policy : how to maximise value from the nickel
resources ?– The need or not for new metallurgical projects and the synergy to be found between existing
units to ensure their long term existence– The public participation in mining projects : their adequate level and their management
• Conclusions by end 2011
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