New Caledonia signs EU strategic partnership to revive troubled nickel industry

New Caledonia and the European Union signed a strategic partnership on Tuesday aimed at linking the French territory's struggling nickel industry to European supply chains, though the deal carries no binding purchase commitments or immediate funding.

European Commission Executive Vice-President Stéphane Séjourné signed the memorandum of understanding in the capital Nouméa alongside New Caledonia's President Milakulo Tukumuli and government member Alcide Ponga, who holds responsibility for nickel.

Addressing New Caledonia's Congress on Monday, Séjourné said the territory could become "a pillar" of Europe's effort to diversify nickel supplies, particularly through closer links with the battery sector. He described the partnership as "non-exclusive" and said it would not require New Caledonia to surrender control over its resources. Fifteen other countries hold agreements of the same kind with the EU, he added.

A roadmap is to be drawn up within six months identifying priority projects, cooperation mechanisms and possible sources of European funding. Reducing the carbon footprint of nickel production is expected to feature prominently, as cleaner energy could help cut heavy operating costs and attract buyers seeking lower-emission supplies.

For Brussels, the deal forms part of a wider push to reduce European dependence on China for strategic minerals. For New Caledonia, it offers broader commercial opportunities and support for modernising an industry facing high energy costs and a loss of competitiveness.

Séjourné said the EU had committed nearly €32 million to New Caledonia's energy transition since 2023, citing the proposed Tontouta pumped-storage power station, a project estimated to cost €400 million.

Vaimu'a Muliava of centrist party L'Éveil Océanien said the memorandum was not binding but "paved the way" to a further agreement, and called on Europe to clarify New Caledonia's competitive advantage within a European framework.