The cessation of exports to Japan, due to the reduced activity proposed by SMSP, meant the immediate closure of the mines and therefore the cessation of SMSP’s activity. To breathe new life into its mining assets, SMSP embarked on a new development strategy, with a view to having majority stakes in metallurgical assets.
In 2005, André DANG met for the 1st time with South Korea’s POSCO, one of the world’s largest stainless-steel producers. Discussions led to an innovative partnership model, linking a miner and a steelmaker, cutting out intermediate costs and reducing the cost of processing low-grade nickel ore. The partnership project is specifically focused on upgrading so-called low-grade ore.
Two joint ventures have been set up, both 51% majority-owned by SMSP (compared with 49% for POSCO): the joint venture and mining branch NMC SAS, which operates the nickel mines located at the Ouaco, Poya, Nakéty and Kouaoua Mining Centres in New Caledonia and supplies the Gwangyang Metallurgical Plant in South Korea, operated by the joint venture, SNNC Co. Ltd, which processes the ore into ferronickel.
The plant, with an annual production capacity of 30,000 tonnes of nickel metal contained in ferronickel, was extended in 2011 to reach a nominal production capacity of 54,000 tonnes by 2016, by lowering the nickel feed content from 2.27% to 2.07%. SNNC sells all of its production to POSCO’s stainless steel plants, ensuring a long-term supply of ferronickel. By backing the mining resource with an efficient and competitive industrial tool, the SMSP/POSCO Partnership ensures the long-term future of operations and the preservation of jobs at the NMC mines.
Since 2020, the economic situation has worn ever more heavily on the joint ventures. Health problems linked to Covid-19, followed by a major rainy season in New Caledonia, gradually affected the annual supply volume of the SNNC plant. In South Korea, the devastating effects of super typhoon Hinnamnor in September 2022 led to the shutdown of the Pohang Furnaces, making it extremely difficult for SNNC to sell its finished product. Lastly, these events occurred at a time when the nickel market is increasingly competitive and energy costs are rising, thereby increasing operating costs.
With the aim of maintaining SNNC’s competitiveness, SMSP and POSCO signed an agreement in 2021 to diversify the Gwangyang Plant’s production towards matte. SNNC thus began its entry into the market for batteries for electric vehicles.
To date, the matte unit is being ramped up and supplies to the plant from NMC have resumed after a period of uncertainty following the events of 13 May in New Caledonia.
André DANG introduces the partnership project to POSCO.
The President of the North Province Assembly, Paul NEAOUTYINE, and SMSP CEO, André DANG, visited South Korea and were received by POSCO’s Senior Executives. Signing of a MOU (memorandum of understanding).
SMSP/POSCO working groups set up to draw the project and draft a MOA (Memorandum of Agreement) to be signed in February 2006.
Establishment of the two companies NMC and SNNC.
Agreement and aid from the Korean government for SNNC.
Construction work begins in Gwangyang.
The Northern Province Assembly approved and authorized the transfer of SMSP’s mining titles to NMC. Closing of the agreements between SMSP, POSCO, SNNC and NMC.
Passing of a local act or law allowing the transfer of SMSP assets without capital gains tax.
First delivery of ore to calibrate the furnace.
Lighting up of the first 94-megawatt electric furnace.
Production start up
Reaching full production capacity.
SNNC shareholders decide to extend the production capacity of the plant operated by SNNC.
SNNC signs a Memorandum of Understanding and lays the foundation stone for the extension of the Gwangyang plant.
Decision by NMC shareholders to launch an investment programme to double NMC’s production capacity.
Inauguration of the second production line.
SMSP/POSCO agreement for matte production at the SNNC site.
