NEW CALEDONIA CONGRESS APPROVES NICKEL LEGISLATION

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Replaces 55-year old French mining regime

NOUMÉA, New Caledonia (Oceania Flash, Mar 19, 2009) - New Caledonia’s Congress has on Wednesday endorse several crucial pieces of legislation related to the nickel mining industry, which is regarded as the backbone of the French Pacific territory’s economy.

One of the main pieces of legislation endorsed unanimously by the 54 MPs is, for the first time, providing a legal framework for nickel mining operations on a land that is usually described as holding at least a quarter of the world’s nickel reserves.

The new text, which updates an old French regimentation dating back 55 years, also provides some innovative guidelines with regards to environmental rules to be followed by any mining operator.

Two major, world class projects are currently under construction in New Caledonia: one (nearing completion) in the Southern part of the main island, driven by Brazilian mining giant CVRD Vale, the second one in the North of the main island, driven by Switzerland’s Xstrata.

Both projects have a capital investment value of between two and three billion US dollars.

So far, the main operator was Société Le Nickel (SLN, a subsidiary of French mining giant Eramet).

The new guidelines, also contained in a "mining code," make provision for a thorough inventory of the mineral reserves of New Caledonia and the obligation to clearly define the minerals’ export policies.

The so-called "Mining Resources Valorisation Framework" is also a direct consequence of the autonomy Nouméa Accord, signed in 1998 between pro-French, pro-independence parties and the French government.

The Accord provides a roadmap for larger autonomy for New Caledonia, including the gradual transfer of powers from metropolitan France to local authorities and an envisaged referendum on self-determination to take place any time between 2014 and 2018.

During what is also the last sitting of the current five-year legislature before New Caledonia’s general elections on May 10, 2009, MPs also endorsed unanimously another nickel-related bill: a so-called "nickel fund" (with an initial provision of some 1.5 Billion French Pacific Francs [XPF, around 16.6 million US Dollars].

The new fund is in essence a stabilization device aimed at buffering unfavorable variations in the world nickel prices, which is currently the case.

There have been criticisms, however, launched at local authorities and executives for not setting up the fund when New Caledonia was still riding on an unprecedented nickel boom that has prevailed during the past ten years.

New Caledonia’s Congress is now expected to dissolve shortly to pave the way for the May general and provincial elections.

With an unprecedented number of parties, some of which result of splits that occurred in recent months both within the pro-French and the pro-independence camps, the May poll is also regarded a crucial in that it will be the legislature leading to the "exit" from the autonomy Nouméa Accord.

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