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‘Unprofitable’ nickel and the colonial legacy in New Caledonia

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Violent protests in Nouméa, the capital of the French overseas territory of New Caledonia in the South Pacific, which have left five people dead, have alarmed the French government.

While Paris declared a state of emergency in the region, blaming “external forces” for the unrest, the island’s indigenous population argues that the new law in the French National Assembly will reduce indigenous representation.

“The proposal to reopen the electoral institution is nothing more than a return to the settler-colonial strategy,” New Caledonian Kanak Senator Robert Xowie, a member of the French Senate, told Interior Minister Gérald Darmanin in March.

A brief history of colonialism

When New Caledonia was recognised as part of the Second Empire in 1853, European settlers flocked to claim indigenous land and set up independent cattle farms.

This low-tech agricultural economy was eventually fuelled by colonial ambitions to turn New Caledonia into a sugar island, similar to the plantations of the Caribbean and Mauritius.

Wealthy planters from Réunion, another French overseas territory in the Indian Ocean, moved in due to crop shortages and invested heavily in sugar cane plantations south of New Caledonia’s capital, Noumea.

These landowners brought with them thousands of ‘indentured labourers’ of Indian, Vietnamese and Chinese origin. Together with the indigenous Pacific Islanders, the Kanaks, these immigrants formed the underclass of New Caledonian colonial society. As landowners and bureaucrats working in France, they would work to enrich wealthy French landowners who were not part of the archipelago society.

The aim of the French white settler landowners was to send their profits to the settler colony in Australia in the hope of ‘economic mobility’ in Europe. New Caledonia as a colony therefore only functioned for the white settlers in the exploitation of natural resources.

How did the self-determination process work?

In the 1980s, when New Caledonia was rocked by violence, including assassinations and kidnappings that left dozens dead, tripartite agreements were finally reached between independence supporters, French supporters and the French government, recognising the Kanaks as the indigenous population of New Caledonia and launching a process of self-determination.

The Nouméa Agreement of 1998 promised that the French Republic would devolve more political power to New Caledonia and its original inhabitants, the Kanaks, over a twenty-year transition period and provided for independence referendums.

The referendums were held in 2018, 2020 and 2021. Although these votes were in favour of ‘staying with France’, the Kanak Socialist National Liberation Front (FLNKS), a coalition of pro-independence parties, had called for the vote to be postponed and for the Kanaks not to participate, arguing that ‘lockdown’ measures and traditional mourning ceremonies during the pandemic had prevented a proper campaign. In 2021, turnout in the referendum was 43.8 per cent.

Protests against the proposed reform of the region’s electoral body, which independents say will weaken the representation of the indigenous Kanak population, are fuelled by deep economic turmoil in the region.

New Caledonia’s wealth is largely derived from its struggling mining sector. With almost 30 per cent of the world’s reserves of nickel, an important material for making stainless steel and batteries for electric vehicles, New Caledonia was expected to play a major role in Europe’s race to catch up with China for critical raw materials.

However, nickel production in the region has fallen sharply and foreign investors have begun to leave the archipelago. The industry suffers from export restrictions imposed by the New Caledonian authorities and high energy costs, making nickel production much more expensive and less profitable than in Indonesia and other Asian competitors.

Huge gap between Kanaks and Europeans

According to the 2019 census, 41.2 per cent of New Caledonia’s population identifies as Kanak and 24.1 per cent as European, with the former group facing significant socio-economic challenges, including lower wages and higher poverty rates.

For example, according to a 2014 study, in 2009 a young non-Kanak was seven times more likely to have a tertiary education than a young Kanak.

A 2012 statistic showed that only 3 per cent of Kanaks had completed tertiary education, compared to 23 per cent of the rest of the population, while the unemployment rate among young native Kanaks was 38 per cent, four times higher than the rest of the population.

In 2010, one in five jobs paid less than two-thirds of the minimum wage in mainland France, and the proportion was much higher in agriculture, domestic work and hotels and restaurants, where part-time work is common.

These low wages must be seen in the context of the very high prices in New Caledonia. With a minimum wage of 78.5 per cent of the French level and prices 34 per cent higher, the purchasing power of minimum wage earners was 59 per cent of the metropolitan level, and even 50 per cent for agricultural workers.

More strikingly, among the regions that make up New Caledonia, the poverty rate reached 52 per cent in the Loyauté Islands, compared to 9 per cent in the Southern Province. In 2014, the employment rate was 65 per cent in the Southern Province, 52 per cent in the Northern Province and 40 per cent in the Loyauté Islands. It should also be noted that the Kanak population in Loyauté is 94.6 per cent.

The collapse of nickel

Despite hundreds of millions of euros in French subsidies, the nickel industry continues to collapse, with production in the first quarter down 32% on the same period last year.

French officials warned in 2023 that New Caledonia’s three main nickel processing plants could soon close, increasing unemployment on the island by 50%.

As protests grow, major investors such as Switzerland’s Glencore and France’s Euramet are either pulling out or refusing to invest further.

Last year, the government came up with a new plan to bail out the industry with subsidies of up to 200 million euros to lower energy prices. But instead of easing tensions, the new ‘Nickel Pact’ was criticised by the New Caledonian independence movement as a ‘colonial pact’ that would give too much power to local authorities.

After months of negotiations, New Caledonia’s representatives blocked ratification of the pact, which is still on ice.

The pact was an attempt by French Finance Minister Bruno Le Maire (who visited New Caledonia on a fact-finding mission in November 2023) to provide around 200 million euros in emergency aid, on condition that New Caledonia’s nickel industry commits to deep reforms to reduce production costs and possibly find new markets in Europe.

The Kanaks argue that the pact in its current form does not ask for enough commitment from the nickel industry companies and also requires New Caledonia to find more than $65 million to finance a cost-cutting electricity scheme, which would require the introduction of new taxes and thus increase the burden on the local population.

No more colonial mining

The mining sector in New Caledonia still bears the mark of colonialism. Considered the cheapest and most aggressive method of extraction, “open-cast” mining was favoured by mining companies for its simplicity, and its immediate environmental damage was ignored. So much so that 330 mines were opened over a period of time on an island 30 times smaller than France, where only 256 mines were open at the height of the coal mining boom.

In the 1930s, the indigenous Kanaks were moved to reservations covering only 10 per cent of their ancestral land in an attempt to increase the availability of mineral rights without harming the cattle industry.

Currently, the mining industry on the island is controlled by three major companies. The largest is SLN, a subsidiary of the French metallurgical company Eramet. The Koniambo nickel plant is operated by Glencore, which is majority-owned (51%) by the Northern Province, where the plant is located. The Brazilian mining consortium Vale operates a large hydrometallurgical plant in the Southern Province.

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Le Pen wins first round of French elections

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The first round of the snap National Assembly elections, called by French President Emmanuel Macron following his heavy defeat in the European Parliament elections, took place on 30 June.

According to preliminary results, Marine Le Pen’s National Rally (RN) party came first with around 33% of the vote, while the New Popular Front (NFP) came second with 28%. Macron’s alliance, All Together for the Republic (Ensemble), received 21% of the vote, while the conservative Les Républicains received 10%.

If no candidate in a constituency wins an absolute majority (more than 50% of the votes cast) in the first round, a run-off election is held.

This is the case in most constituencies. According to preliminary results, only 39 candidates from the RN, which has 297 MPs, have won an absolute majority in their constituencies.

The second round will take place on 7 July and will be between the top two candidates from the first round. However, any candidate who received the votes of at least 12.5 per cent of registered voters in the first round can also participate in the second round. The candidate with the most votes in the second round wins the seat, even if there is no absolute majority.

Therefore, even if the RN were to win the first round, it is currently uncertain whether they would have an absolute majority (289 seats) in parliament.

Le Pen wants ‘absolute majority’

Le Pen declared that her party had “practically wiped out” Emmanuel Macron after winning the first round of the election.

Speaking after the results were announced, Le Pen said she would seek an “absolute majority” in the second round of voting next Sunday.

Addressing her supporters after the polls closed, Le Pen said: “Democracy has spoken and the French have almost wiped out the Macron camp and put the RN and its allies in the lead. We need an absolute majority so that [RN leader] Jordan Bardella can be appointed prime minister within a week,” she said.

Le Pen was re-elected as MP for Hénin-Beaumont in the first round after winning more than 50% of the vote.

‘No vote for the RN’ statement by Mélenchon

Jean-Luc Mélenchon, leader of France Without a Front (LFI), the main party of the New Popular Front (NFP), said on Sunday that Macron’s alliance had suffered a “heavy and undeniable” defeat in the snap elections and called on the French people to vote against the far right.

The LFI leader said he would withdraw his candidates in constituencies where his party came third and the RN was leading ahead of the run-off.

“Our instructions are simple, direct and clear. Not one more vote, not one more seat for the RN,” Mélenchon said.

The LFI leader also called on voters to give “an absolute majority to the New Popular Front”.

“The country will have to make a choice,” Mélenchon said in a statement from his party’s campaign headquarters. He argued that the options for Sunday’s second round were “either the New Popular Front or national unity”.

Macron calls for a ‘broad alliance against the right’

For his part, Macron called for a “broad alliance” to prevent the victory of the “extreme right”.

“The time has come for a great, openly democratic and republican rally against the National Rally for a second round,” he said.

Prime Minister Gabriel Attal argued that “not a single vote should go to the National Rally”.

Warning that “the far right is on the verge of power”, Attal said his party would abandon its candidacy in 60 constituencies to support “republican” candidates against the RN.

Demonstration against the RN in Paris

Meanwhile, thousands of people took to the streets of Paris to protest against the RN’s victory.

“I’m really worried about the far right coming to power,” Alban, a 23-year-old student who requested anonymity, told POLITICO. Alban said they still had a week to go and would “keep fighting”.

Reuters later broadcast video of protesters setting off fireworks as they marched through Paris. BFMTV reported that 200 police had been deployed in Lyon to deal with the protests.

The ‘security cordon’ has collapsed and will collapse again

A week of political bargaining will now begin as centre and left parties decide whether to withdraw from individual seats to prevent the RN, long excluded from mainstream French politics, from winning a majority.

In the past, when the RN has made a strong showing in the first round of voting, centre and left parties have joined forces to prevent it from taking office under a principle previously known as ‘cordon sanitaire’.

After Jean-Marie Le Pen, Le Pen’s father and the decades-long leader of the RN’s predecessor, the National Front, unexpectedly defeated Socialist candidate Lionel Jospin in the 2002 presidential election, the Socialists threw their weight behind centre-right candidate Jacques Chirac, giving him a landslide victory in the second round.

Marine Tondelier, leader of the Greens, seen as the more “moderate” part of the NFP, made a personal plea to Macron to withdraw from some seats to prevent the RN from winning a majority.

“We are counting on you: withdraw if you come third in a three-way race, and if you don’t make it to the second round, ask your supporters to vote for a candidate who supports republican values,” Tondelier said.

Bardella hits Popular Front, not Macron

In his speech last night, RN leader Jordan Bardella, who wants to become prime minister if his party wins on 7 July, did not criticise Macron’s camp, but instead attacked the National Front.

Bardella said the New Popular Front was “an existential threat to the French nation” and accused the NFP of wanting to disarm the police and open France’s borders to migrants, and of having “no moral limits”.

“It is time to give power to leaders who understand you, who care about you,” the RN leader told voters.

AfD wants RN to win

The RN also received support from the Alternative for Germany (AfD), from which it had recently distanced itself.

AfD leader Alice Weidel said she hoped for a decisive victory for the RN in the French parliamentary elections, although she acknowledged that there was a rift between the parties that would be difficult to heal.

Weidel told the Financial Times that she was “hopeful” for the RN and optimistic that its leader, Jordan Bardella, would become France’s youngest ever prime minister.

Weidel said he had “full confidence in Bardella and the RN’s ability to shake up their country”, while Bernd Baumann, leader of the AfD in the Bundestag, said the RN’s popularity showed that the entire European right “has the wind in its sails”.

“Giorgia Meloni, Marine Le Pen, the FPÖ in Austria, all this is a confirmation for us and shows that we are on the right side of history,” Baumann said.

But Weidel conceded that the AfD and RN had little chance of overcoming the dispute that led to their expulsion from the Identity and Democracy (ID) group in the European Parliament in May, following a series of scandals involving the German party.

Weidel said the AfD was looking for new partners and was trying to form its own group.

Weidel also insisted that he had “no grudge” against Marine Le Pen, the RN’s parliamentary leader.

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Serbia-Kosovo negotiations collapse

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The European Union’s attempt to breathe new life into stalled negotiations between Serbia and Kosovo has collapsed after the Serbian president and Kosovo prime minister failed to meet as planned.

The meeting, which was due to take place almost a year after the two leaders last met, came after repeated failed negotiations.

Both Serbian President Aleksandar Vucic and Kosovo Prime Minister Albin Kurti met separately with EU representatives, but according to EU chief diplomat Josep Borrell, there was no progress in implementing the agreement and no trilateral meeting.

Talks between Serbia and Kosovo aimed at reaching a major agreement that would pave the way for the normalisation of relations broke down last year.

During a summit in North Macedonia in March, Vucic refused to sign the EU- and US-backed Ohrid Agreement, citing pain in his right hand that would “probably last for years”.

Diplomats continued to call for its implementation, but the unsigned agreement was not implemented by either side.

Borrell said the EU “will continue to put all its efforts and capacities behind the normalisation of relations between Kosovo and Serbia”.

Borrell said those efforts would continue next week when he hosts the two negotiators in Brussels.

Vucic blamed Kurti for the lack of talks, saying his Kosovar counterpart “did not dare to meet”.

Kurti countered that he had set conditions for talks with Vucic, including the surrender of Milan Radoicic, the former vice-president of Kosovo’s leading Serb party, who confessed to leading a commando team that ambushed a Kosovo police patrol in September last year.

As last year’s talks collapsed, riots broke out in Serb-majority areas of northern Kosovo.

Tensions escalated further after Pristina made the euro the only legal currency in its territory in February, effectively banning the use of the Serbian dinar.

This put pressure on Serbia’s ability to continue funding a parallel health, education and social security system for Kosovo Serbs.

Kurti defended the move as a means of stemming the flow of large sums of money from Serbia into Kosovo and bringing organised crime groups to heel.

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EU seeks defence partnerships with Japan and South Korea

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The European Union (EU) may seek security and defence partnerships with Japan and South Korea, paving the way for wider joint development projects in the defence industry, Nikkei Asia reported.

“We hope to develop partnerships with Japan and South Korea to work more closely together,” a senior European Commission official told Nikkei, adding that the security environment in Europe and Asia has changed dramatically.

Brussels is aiming for a ministerial-level agreement with Japan by the end of the year.

Brussels also has security and defence partnerships with non-EU countries such as Norway. Establishing a similar partnership with an Asian country would be a first.

Japan and the EU share common challenges such as relatively small national defence industries, high R&D and production costs, and dependence on US contractors.

There is also a proposal to increase opportunities for Japanese companies to participate in EU-led defence R&D programmes. The EU could provide funding for projects between Japanese and European companies.

Working with European companies could provide Japan with opportunities to develop defence technology, reduce costs and expand hardware sales channels.

For the EU, the partnership would provide a basis for defence industrial cooperation with Japan, offer opportunities for joint equipment development and increase supply options.

Meanwhile, South Korea is also increasing its arms exports to Europe. Poland has placed large orders for South Korean K2 tanks and K9 howitzers. Romania, Finland and Estonia are also increasing their purchases of South Korean weapons.

The EU will also consider cooperation in areas such as space, cybersecurity, disinformation and maritime security. The Japan partnership plan also includes cooperation on nuclear disarmament and non-proliferation, an important issue in the election campaign of Japanese Prime Minister Fumio Kishida.

In the wake of Russia’s intervention in Ukraine, the EU published its first defence industrial strategy in March, under which member states will work together to develop and increase arms production. Recognising the EU’s limitations on its own, the bloc is seeking to deepen ties with Japan, South Korea and other Western allies in the region.

In an interview with Nikkei in June, European Commission President Ursula von der Leyen said that security was one of the areas in which she wanted to improve Japan-EU relations. At a summit in July, the two sides agreed to launch a ministerial-level strategic dialogue on security.

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