New Caledonia may allow nickel exports to China as price tumbles
By James Regan and Cecile Lefort
SYDNEY, March 9 (Reuters) - New Caledonia is weighing lifting restrictions on the sale of nickel ore to China as world prices for the metal tumble and the future of a key Australian customer is in doubt.
New Caledonia has long resisted selling ore directly to large consuming countries such as China in order to preserve its domestic smelting and refining industry, a main source of revenue for the South Pacific French Territory.
But a steady decline in nickel prices is putting pressure on New Caledonia's three smelters, owned by Glencore , Vale and Eramet subsidiary Societe Le Nickel, cutting export revenue for the government.
Combined the three smelters supply 10 percent of world demand.
At the same time, Queensland Nickel (QNI), one of Australia's biggest nickel refineries, was forced into voluntary administration.
"We must find alternatives in case of failure from QNI," New Caledonia President Philippe Germain told local media on Tuesday, as he detailed a government emergency plan to address the impact on the economy.
New Caledonia is awash with nickel ore, holding as much as a quarter of the world's known reserves, and the metal dominates the economy.
QNI imports about 3 million tonnes of ore a year from New Caledonia. Exports of ore to China would be limited to 2 million tonnes, according to the action plan. No timeframe was given for a final decision. Continuación...