Aug 8 (Reuters) - The new president of New Caledonia's southern province has cancelled a deal with two major nickel producers to explore a huge ore deposit, a New Zealand radio station reported on Friday.
Philippe Michel said last April's memorandum of understanding with French mining and metals group Eramet and Brazil's Vale SA was illegal on five counts, according to the report by Radio New Zealand.
Michel's comments come as the territory reviews its mineral laws following leadership changes and a jump in nickel prices of 35 percent this year after Indonesia banned ore exports in January.
Michel told Reuters in June the South Pacific island must plan for a future without nickel mines and would introduce an export tax linked to the price of nickel to create a future fund.
According to the radio report, the venture would have explored Prony and Pernod nickel ore deposits in the main island's south over four years. They were estimated to contain 3 million tonnes of nickel to be mined over 50 years.
A deal had been proposed for a joint venture be set up in which the provincial government would have been the biggest shareholder, the report said.
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 accounts for around 20 percent of economic output in the French-run territory, according to official figures.
Nickel processing has become a flashpoint for some local groups due to environmental damage. Earlier this year, a chemical spill sparked riots that closed Vale's Goro nickel mine for about a month. (Reporting by Melanie Burton in Sydney; Editing by Alan Raybould)