An agreement has been reached for the sale of the South factory

After several months of conflict, an agreement was signed between the different stakeholders. Explanations.

On Thursday 4 March, a “political agreement” was reached for the purchase of this nickel plant that the Brazilian group Vale wants to sell. The Southern Province where the factory is located, the customary people and the pro-independence party FLNKS reached an agreement. The customary people and the pro-independence party did not want Trafigura. In the end, the Swiss raw materials trader remains present, at 19%, compared with 25% in the previous offer. A financial company set up with current plant managers and an Australian investment fund will have 30%. Caledonia will own 51% of the new consortium called “Goro Resources”. The outgoing president of Vale NC, Antonin Beurrier, who was originally supposed to take over the reins of the consortium, is no longer a bête noire of the independentists and no longer appears.

1.5 billion Australian dollars

The transaction involves a financing round of around €1 billion, of which €500 million is left in the coffers by Vale to finance a tailings disposal facility. This is essential for the safety of the plant. 380 million is provided by the State in the form of a loan and guarantee. Trafigura and the investors provide the remainder.
Does this agreement put an end to the conflict? For the time being yes, but…

Two areas of shadow

There are indeed two large areas of shade. The first is that no industrialist is part of the tour de table. However, an industrialist is essential to manage the factory.
The second grey area is that this agreement doesn’t seem to have unanimous support among the opponents. Indeed, it should be remembered that the conflict arose because the customaries and the independentists didn’t want the factory to be taken over by the Swiss trader Trafigura. The question is therefore whether this agreement will hold up in the long term.
This fire seems to have been put out, but Caledonia has three others in progress: the absence of a president in the government, the 2021 budget which still hasn’t been voted and the nasty cyclone Niran .