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Mining & Resources

Insights from New Caledonia Nickel

23 Jul 2013, by Informa Insights

At a time of critical challenges and high volatility of the markets, the week-long New Caledonia Nickel conference provided attendees from the global nickel industry the opportunity to discuss the most pressing topics and questions as well as unrivalled networking opportunities with their peers.

Jim Lennon, Chairman Commodities research at Macquarie Securities asked in his opening address if the laterite revolution can continue. He predicted that “the nickel industry will still suffer over the next two years”. He based his analysis on the fact that the nickel stock level is reaching its peak. At the same time the value has decreased.

In a recent interview with IMM Events, Mr Lennon said that “China is absolutely dominating [nickel] demand, being virtually the ONLY growing market for nickel and stainless steel over the past decade.” He elaborated further on his argument at the conference saying that the current situation of overproduction is to some extent the result China’s strategic growth in nickel pig iron ore. Mr Lennon expects the nickel prize to recover in 2016 which will mark the beginning of a new cycle of prosperity.

The speaking panel at New Caledonia Nickel were united in calls for the need to develop a mutual strategy in order to remain competitive in the global nickel market. However, New Caledonia is still highly regarded for its great potential. According to analysts’ estimates at the conference, the archipelago holds 25% of the globe’s nickel resources.

One aspect currently standing in a way of a more integrated strategy is some local resistance to the opening of new mines. The geographical location also puts some limitations to access to adequate technology and human resources.

The political environment further complicates the development of a common strategy. Opposing political parties are struggling to come to an agreement on offshore versus local development.

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