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New Caledonia Officials Want Goro Tax Breaks

Sunday: December 16, 2007

New Caledonian officials will ask the government for tax breaks to be extended in the Goro Nickel project being developed by Brazilian group Companhia Vale do Rio Doce (CVRD).

“The cost of the factory has nearly doubled to US3$.5 billion. We are asking the state to help cover this additional contribution,” says Philippe Gomes, president of South Province.

Through Societe de Participation Miniere du Sud Caledonien (SPMC), the three provinces of south of New Caledonia acquired 10 percent of the project in February 2005. The remaining 69 percent was at that time owned by CVRD Inco and 21 percent by Japanese groups Sumitomo Metal Mining and Mitsui.

The Goro Nickel project is set to go onstream in early 2009, but with development costs have risen sharply since 2005, the ownership has shifted, seeing CVRD's share rise to 74 percent while the provinces' stake has shrunk to 5 percent.

To reacquire their 10 percent stake in the project, the provinces are asking the state for an extension of tax breaks similar to those given to the Swiss group Xstrata which is developing the Koniambo project on the northern part of the island.