CVRD reviewing Goro as New Caledonian nickel strike comes to an...

CVRD reviewing Goro as New Caledonian nickel strike comes to an end
By: Lawrence Williams
Posted: '28-JAN-07 18:46' GMT © Mineweb 1997-2006

LONDON (Mineweb.com) --As the New Caledonian strike, which has severely disrupted the island’s nickel mining and smelting sector for the past four months, seems to be drawing to a close, it appears that CVRD is reviewing the future of its $3 billion Goro nickel laterite project.

Although the New Caledonian strike was, in part, aimed at the construction of the Goro plant and facilities, and the Filipino workers employed on it, it was the Pacfic island’s largest nickel miner, Societe Le Nickel (SLN), which bore the brunt of the action by the CSTNC union. Strikers blockaded SLN’s mines disrupting the flow of ore to the big Doniambo smelter and ferronickel complex in the island’s capital of Noumea, and the action was said to be costing SLN (a subsidiary of France’s Eramet) $10 million a week.

During the strike, SLN had dismissed striking workers, but recently agreed to reinstate them if the strike were to be called off. SLN has been in talks with the CSTNC union to decide the status of re-employment of the striking workers as the long period of labour disruption draws to a close.

Feelings on the island have been running high, though, over CVRD Inco’s Goro lateritic nickel project which has seen cost overruns and some disruption, as well as a successful injunction by Kanak (indigenous islanders) activist group Rheebu Nuu which has potentially disrupted construction on a part of the site on environmental grounds. The latest cost figures for Goro show that these have escalated to a massive $3 billion (50 percent more than the previous estimates) and that the plant would now only come on stream in late 2008 – a year behind schedule – and this only if there are no further problems and start up of the high pressure acid leach (HPAL) facility goes smoothly, which is no foregone conclusion.

Perhaps ominously for Goro, CVRD which gives a fair amount of detailed data on its Latin American and Canadian nickel construction projects in its latest release reviewing its $6.3 billion investment programme for 2007 says simply “Goro is a lateritic nickel project in New Caledonia, in the South Pacific, with an estimated production capacity of 60,000 tons a year of nickel. The project is under review.”

This could be interpreted in many ways – however there is the definite possibility that CVRD may feel the project is not worth the continuing hassle with environmental opposition (with some political nuances) to it still under way......... been affected by its mining sites. One gets the feeling that if this olive branch is rejected in any subsequent talks, the giant mining company may consider alternative options for the project than continuing to pour money into it.