FAQ – Frequently Asked Questions

What are the relationships between SMSP and other metallurgical and mining operators in the Territory?

Often, the media oppose us for reasons that are unclear to us.

We are all actors of the nickel economic activity in New Caledonia with different strategic visions.

SMSP meets and works regularly with other nickel companies on many common subjects and issues.

All companies in the nickel sector are required to share, either commercially or technically, and very often regarding regulatory aspects. And as a matter of fact, each of us develops synergies according to its interests in terms of training, recruitment and exploration.

However, each representative of the companies does remain liable individually to manage assets according to the company’s best interests.

Is that true SMSP owns a XPF 1000 billion debt as published and relayed by the media?

The CTC mixed up social accounts with consolidated accounts. You have to look at SMSP accounts that are filed every year. SMSP owes a debt of XPF 23 billion to its financial partners, which has resulted in an asset value of more than XPF 45 billion.

This XPF 23 billion debt is due to the financial partners of SMSP who were willing to participate in the financing of the Northern plant.

Why the partnership with YICHUAN wasn’t achieved favorably?

Regarding China, we were exploring opportunities, hence the possibility of acquiring a majority stake in a plant in China in partnership with the shareholders of YICHUAN, which would be supplied by the mines of the SMSP group.

While the conclusion of the final transaction was imminent and our subsidiary holding the SMSP’s stake in China had been set up since August 2022, a disagreement arose over the partner’s unexpected request to remove certain liabilities from its liability guarantee.

Like any reasonable and responsible company, we made the decision to end the soon-to-be partnership.

SMSP is under a safeguard measure, what does it mean and is it still running?

SMSP submitted its safeguard proposal plan to authorities in charged, and it was approved by the Commercial Court in October 2022. The plan has started and we made the first payments as planned.

SMSP likes to mention the profits of its plant in South Korea, but where does the money go?

The profits of SNNC return to New Caledonia in two ways: the sale of the ore which generates the turnover of NMC, which employs, trains and mobilizes subcontractors in Caledonia on an everyday basis. And the dividends paid to SMSP, which are currently used to repay its creditors, mainly the banks that are partners in the financing of the Northern plant. So they’re involved in the development of the North.

Why build a local plant and an offshore plant?

Focus is not much about either it must be a “local plant” or an “offshore plant”. Rather, it is the ore grade that determines the choice between local or offshore processing. We’ve always been aware of two things. Low-grade ore requires specific technology and expertise to be cost-effective. We didn’t have it in 2008, and we don’t have it today. For this reason, SMSP turned to POSCO. The Northern plant was built to transform a higher-grade ore.

We often hear about the energy transition; do you have a roadmap? What are your actions/projects for environmental protection?

Our energy transition is first of all based on the Climate Energy Plan of the Northern Province and the Energy Transition Scheme adopted by the Government of New Caledonia (STENC). We do work in coordination and collaboration with the subsidiaries to move them towards greener nickel. Workshops have been set up within each subsidiary to this end.

Initiatives launched are first about assessing the carbon footprint of our businesses, and from there to identify solutions to implement from technical and human aspects. For example, NMC‘s teams focus on optimizing the utilization of cars and trucks to operate, either to dig ore or mobilize employees on sites. For Cotransmine, if possible, this involves installing solar panels or updgrading working methods (reducing the need for equipment to limit unnecessary CO2 emissions).

Broadly, NMC, Cotransmine, and SMSP have developed proactive policies on revegetation, waste management, and monitoring air and water quality. These initiatives stem from regulatory obligations, and are extended and deepened beyond legal requirements wherever possible.

We are also working with Koniambo Nickel to reduce our environmental footprint. This requires a lot of research, the main one aiming to replace coal used for operation.

Nickel ore is an exhaustible resource. When it is exhausted, what will happen?

It’s a non-renewable resource, so yes, it’s exhaustible. That is also why we need to optimize the operations and upgrade the value for the return of profit to the country. For the future, we must anticipate it, but it is no longer up to the industrialists. It is a political responsibility, a duty to anticipate.

How long do you estimate your remaining areas of operation to last?

It’s a complex question because it changes over time as technologies progress. Twenty years ago, no ore which was under 1.4% nickel contained was processed. Today, it is known that plants can process ore containing only 0.9% nickel. We still have decades of exploitation ahead of us.