Clarification: Mining Strategy and SMSP

Nickel news currently is very dense and the SMSP Group is following with interest the discussions on the mining strategy in New Caledonia.

It is clear that bad faith and politicising have our institutions agonizing and preventing them from taking decisions in the interest of the Country only.

We have witnessed this again recently, during the debates held in Congress on 10th  January (2023) on the reform of mining taxation. Scandalous comments were made and aimed at discrediting our Group and thus its employees, shareholders and managers.

In spite of the significant disappointment we do experience, that our strategy, which is the only one serving the general interest, is not protected by law and will therefore be ruled to the same level of taxation as companies exporting to foreign founders, and whereas some have attacked our group without shame and without foundation and have called for the truth to come out, we want to make the point out the truth now.

And we provide proofs to support this truth.

The SMSP is one of the most transparent companies in New Caledonia.

We uphold this because SMSP and all its subsidiaries submit their annual accounts and management reports with the Registry of the Mixed Commercial Court each year.

We uphold this because SMSP and its subsidiaries were audited by the Territorial Chamber of Accounts in between 2019 and 2021 covering 7 financial years from 2013 to 2020. No other company in the sector has been subject to such control. An audit which did not find any managing irregularities…

The question is who will know (and want) to understand what our numbers and explanations highlighting actually are.

The comments made in Congress lead us to be extremely cautious about the ability of some people to understand schemes that are supposedly not rocket science.

How can we still hear in 2023 that the offshore model is “value destroying” for Caledonia.

This attempt at provocation, this blatant lie, was not lost on anyone and was, moreover, quickly corrected by Mrs. BACKES herself who finally acknowledged the obvious:

“I am convinced … that there is a part that needs to be transformed externally. …we are in favor of saying that yes, there is a part of our ore that cannot be processed here, and as long as we do not process it here, we might as well process it in offshore plants, because yes, of course it is more profitable.”

Not everyone in her political group seems to have understood this, so we want, once again, to explain the basics of our strategy since, apparently, there is still room for doubt.

A first premise must be stated and the SMSP has never disputed it: it is the fact that local transformation of the mineral resource must be favored. It was in this spirit that the Northern Factory was created.

On the other hand, and as Mrs. BACKES acknowledged, regarding the minerals which cannot be processed locally, the offshore sector is more profitable than the ‘traditional’ export sector. That is a point to be made.

The demonstration is simple: in addition to the sale price of the ore received by the NMC exporter, the SMSP receives 51% of the dividends generated by its processing plant, thus nearly 12 billion at the end of 2022.

As such, since 2009, SNNC has generated a cumulative net profit of XPF 41.8 billion from Caledonian ore, of which 51% has been paid back to SMSP.

How can it be said that receiving XPF 12 billion in dividends out of XPF 41.8 billion in income is “value destroying” for Caledonia? Don’t be afraid of anything!

Moreover, even if some say that it is not enough, we reply that XPF12 billion is more than zero. It seems obvious yet…

Zero, this is what we would have received if SMSP hadn’t changed the established order and if she would have continued to sell the ore to foreign steelworkers. In addition, this partnership has stabilized NMC’s mining operations.

Proof is that NMC will be the biggest contributor to this tax. Thus, NMC will contribute the most to public finances.

So, to those who spit on NMC, on SMSP Group, on our employees, on our managers and shareholders, we say thank you because they help us.

Indeed, every insult, lie and slander against us only strengthens our solidarity and belief in our values.

Truth is important for ensuring peace in a society, and respect as well.



Chief Executive Officer (CEO)