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As US and China vie for Pacific influence and resources, tiny New Caledonia can play an outsize role
- Far-flung French territory holds 7.1 million tonnes of high-grade nickel vital for making lithium-ion batteries to power electric vehicles
- Mining and politics merge as pro-independence indigenous Kanak population seeks more local control and closer Beijing ties
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The hairpin curves and bumpy roads connecting the mining settlement Goro to the outside world slice through coral-fringed cliffs and forests lined with waterfalls and streams. Yet what makes this picturesque area noteworthy lies deep beneath its red earth: nickel, also known as green gold.
Goro is in New Caledonia, a far-flung archipelago 900 miles east of Australia and home to just 272,000 people. But the French territory carries outsize influence, holding about 7.1 million tonnes of nickel – a quarter of the world’s known supply of the mineral. Nickel is vital for manufacturing lithium-ion batteries used to power electric vehicles.
As China vies to expand its influence in the Indo-Pacific region and the US and its allies try to counter the regional giant by limiting its reach into supply chains, tiny nickel-rich New Caledonia has emerged as a crucial player in a fierce competition for a sorely needed mineral that could ultimately shape global economics.
The stakes for the US run high. It has no domestic nickel-processing capacity and boasts only one active nickel mine, located in Michigan and due for closure in 2025. Energy officials call grade-one nickel a “key vulnerability and key opportunity”.
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In contrast, Chinese companies refine nearly 84 per cent of the world’s nickel. Traditionally Indonesia has been a major supplier to the world, accounting for 37 per cent of total output. But its nickel requires additional refining to make batteries, unlike New Caledonia’s higher-grade ore.
Last year the Biden administration’s 100-day review of critical supply chains called on the US government to “invest in nickel-refining capacity in coordination with allied nations”.
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