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Can this small Island in the South Pacific power Tesla's ambitions?

Written by / Zhu Lin

Editor/ Qian Yaguang

Design / Shi Yuchao

Source: New York Times, by By Hannah Beech

Starting from the reef-surrounded coast of New Caledonia, the Coral Sea stretches all the way to the South Pacific. Slender pine trees, like exotic Christmas trees, dot the coastline. It's one of the most biodiverse places on earth, and it's stunningly beautiful until the summit takes on a different view: a dug-out red field is punctured by a gushing chimney, and huge trucks rumble through the lunar-like terrain.

This is the largest nickel mine on a small piece of French territory between Australia and Fiji, and may hold a quarter of the world's nickel reserves. It also poses a key test for Tesla, the world's largest electric car manufacturer. Tesla wants to take control of its supply chain and ensure that the minerals used in car batteries are mined in an environmentally and socially responsible manner.

Can this small Island in the South Pacific power Tesla's ambitions?

Tesla's strategy is the best effort of Western electric vehicle manufacturers to directly access mineral resources, which can serve as a model for a green industry. This green industry is facing a troubling paradox. While consumers are attracted to the clean reputation of electric vehicles, the process of obtaining basic raw materials such as nickel is dirty, destructive, and often fraught with political risks.

Due to its nickel industry, New Caledonia has one of the largest per capita carbon emissions in the world. Mining, which began shortly after New Caledonia was colonized in 1853, was closely linked to the exploitation of the local Kanaks. For more than a century, land has been plundered and traditions destroyed, resulting in Goro's nickel production being frequently affected by labor strikes and political protests.

Tesla's ability to produce cars is close to 1 million a year, and if done well, its approach could become a pioneer in setting global standards for the electric vehicle revolution, another out-of-the-box move by the company's co-founder Elon Musk.

Can this small Island in the South Pacific power Tesla's ambitions?

If done wrong, Goro will be a cautionary tale about how difficult it is to achieve true sustainability. "Green" or "local action" is the pretty tagline of Tesla Motors. However, to realize these ideals, not only will it take capital and innovation, but also a sufficient knowledge of one of the most remote places in the world, a French-ruled island scattered on the brink of independence. Some of the world's largest nickel miners have tried to profit from Goro, but have failed.

"We are a small place in a complex jurisdiction." Antonin Beurrier, CEO of Prony Resources, said. The consortium took ownership of the Goro nickel mine this year. "We have to reinvent the industry."

Can this small Island in the South Pacific power Tesla's ambitions?

Reinventing the business is actually Musk's mantra, whether it's the pursuit of autonomous driving or space travel. Tesla positions itself as the ideal, and perhaps the only force, to transform this loss-making mine plagued by political and environmental crises.

Unlike other major U.S. automakers, Musk insists on buying most of the metals needed for car batteries directly from mines around the world. As automotive production increases and global competition for these materials intensifies, this strategy ensures that he can meet all his needs. The company reached an agreement with Goro in October 2021 to directly purchase up to a third of Goro's nickel over the next five years.

Goro's future prospects are fascinating. Carbon emissions will fall significantly as renewable energy powers nickel processing facilities. Toxic liquid waste, also known as tailings, is packaged into neatly dried residues. Local communities will become partners in deciding together how to get the most out of the natural resources on tribal lands.

Can this small Island in the South Pacific power Tesla's ambitions?

In a sustainability report, Tesla said that by working directly with mines rather than buying nickel from middlemen, the company can "address sustainability issues such as biodiversity impacts, energy consumption, human rights and tailings management."

"Tesla works directly with mineral producers and refiners who align with our mission to deliver sustainable, responsible materials," the report said. ”

Tesla still relies on metals from mines in other countries. As the world shifts from fossil fuels to renewables, competition for these mineral resources has made it difficult for businesses. In early 2021, Musk tweeted that his company's "biggest concern" about expanding battery production was securing an adequate supply of nickel.

Can this small Island in the South Pacific power Tesla's ambitions?

Tesla employees rarely give media interviews and rarely talk about the deal in New Caledonia. For automakers who need to source minerals and materials from around the world, any review of their supply chains, or even of new initiatives to clean up the problem, is likely to be unpopular. In the Democratic Republic of the Congo, for example, car companies have been criticized for mining cobalt, sometimes by children, under unsafe conditions.

If there's one place where the feat of green nickel can be accomplished, it's New Caledonia. New Caledonia, with a population of 270,000, is limited by strict European environmental and labor standards due to its overseas territory as a French overseas territory. Local governments are also eager to protect local rights. The Government was led by a coalition representing the indigenous Kanaks, generations of European settlers and new Arrivals to the French, as well as Asian and Pacific islanders who came to work in the mining areas.

Can this small Island in the South Pacific power Tesla's ambitions?

Other major nickel-producing countries, such as Indonesia and the Philippines, have looser regulations and even looser regulations. They produce nickel at a much lower cost than New Caledonia. To compete with these low-cost competitors, New Caledonia now positions itself as a premium nickel supplier for rechargeable batteries, rather than cheap products for stainless steel.

Even with protection, the exploitation of natural resources in New Caledonia remains a sensitive issue. In 2021, nickel prices rose by about 25 percent, reflecting the importance of the mineral in the movement to move away from fossil fuels. But so far, that hasn't brought bigger profits to miners.

Can this small Island in the South Pacific power Tesla's ambitions?

Goro's former owner, Brazilian mining giant Vale, is desperate to get out of the mine. Tensions over who will buy the nickel-processing plant sparked protests that forced the Goro plant to close for months, a supply chain disruption that could have disastrous consequences for Tesla. In early 2021, the conflict came close to leading to the collapse of the Government of New Caledonia.

"The history of nickel mining in New Caledonia has been marked by a war between the multi-ethnic and local populations, as well as a history of colonization." Mapp said. He came to power after the Goro conflict and was the first Kanak leader of the regional government. "For Tesla, under the new ownership, we now have a compromise and it is possible to open the Goro factory, but it is still fragile."

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The coastal road to Goro winds through a bay covered with colorful corals, with charred cars scattered along the way. The dozens of vehicles that burned down are traces of months of struggles that left coal mines idle and led to the collapse of the New Caledonia government in February 2021. They are a heartfelt reminder that tight politics could hinder Tesla's efforts to secure a stable supply of nickel.

André Vama is one of hundreds of Kanaks in 2021 who have obstructed the mine's operations with burning tires and vehicles to barricade the mine.

Can this small Island in the South Pacific power Tesla's ambitions?

"From the very beginning, we were against this mine." Wama said he was the leader of a local environmental coalition. "This is our national heritage, our asset, and the Karnaks are victims of history, and they have no control over what should have belonged to us."

Local opposition to the mine is both political and environmental. Goro's processing plant, which relies on high-pressure pumps into acid, began operations in 2010 after years of competing with local Karnaks for land ownership. Within five years, the facility had five chemical spills.

The biggest leak occurred in 2014 and caused 100,000 litres of garbage to flow into the creek. According to environmental groups, thousands of fish died.

Can this small Island in the South Pacific power Tesla's ambitions?

New Caledonians panicked in one of the deadliest disasters in recent history at another mine run by Vale. In 2019, an iron ore tailings dam from Vale in Brazil burst its banks, flooding a workers' canteen and residential area, killing 270 people. Vale's management in New Caledonia says the design of the Goro dam is different. Most of them now work for Prony Resources. But the situation is worrying.

"It's clear that what we need to do is show that safety and sustainability are our top priorities." Denis Loustalet, chief sustainability officer at Prony Resources, said. "Even a small accident is too serious."

In New Caledonia's decades-long struggle for independence, Goro was repeatedly a flashpoint. In 2014, after the spill, the Kanaks set fire to Goro's facilities, which, in the eyes of locals, were linked to colonial authorities. The mine was shut down for more than a month. Vale estimated losses at $30 million.

Can this small Island in the South Pacific power Tesla's ambitions?

The latest protests began in late 2021, during a worrying political season in which New Caledonians were in the midst of an independence referendum. When the "no" vote won by a narrow margin, the Kanaks took to the streets. Vale has announced that it wants to withdraw from New Caledonia and is negotiating a transfer of ownership to companies such as Trafigura, a scandal-ridden international commodities trader.

The Karnak community was largely excluded from the initial Goro negotiations, this time demanding more control. As provocative rumors spread about Vale's intentions, Kanak workers and villagers stormed the Goro factory and set fire to the facility again.

The policeman was injured. The destruction, blockade and subsequent closure of the mine once again cost the mine tens of millions of dollars. Authorities said one of the masterminds of the violence was a tribal chief who was Mapp's older brother.

Can this small Island in the South Pacific power Tesla's ambitions?

After months of negotiations, a compromise was finally reached in March 2021: 51 percent of Prony Resources, Goro's new ownership consortium, is controlled by the provincial government, miners and members of the local community. Tork got 19 percent, not the 25 percent originally planned.

The Tesla deal, announced six months later, was warmly welcomed by Karnak's political leaders, who said it would force Goro to stick to high standards.

The Tesla executive who brokered the deal was Sarah Maryssael, the division manager responsible for battery metal procurement. Prony's chief executive, Burrill, and local politicians say she is an Australian engineer who worked at Goro and knows how to deal with the complex political situation in New Caledonia.

Can this small Island in the South Pacific power Tesla's ambitions?

Roch Wamytan, a member of parliament in New Caledonia, said: "If there had been no conflict and no Kanaks coming forward, we would not have where we are today." Now we can sleep with peace of mind because we know the whole world is watching us and making sure we take green nickel seriously. ”

"The Tesla deal makes that happen." He added.

A place in the Pacific Ocean

A simple lesson from hydrometallurgy is that Goro's soil is rich in nickel and cobalt, extracts useful minerals, requires a lot of energy, and also means a lot of harmful gas emissions.

First, giant excavators, loaders and trucks using fossil fuels scoop up and transport the soil away. The soil slurry is then fed into a coal-fired facility that uses high-temperature sulfuric acid from high-pressure shock waves to extract nickel and cobalt.

Can this small Island in the South Pacific power Tesla's ambitions?

Prony Resources has committed to halving its carbon emissions by 2030 and becoming carbon neutral in 10 years. The plant's waste, which is currently kept as toxic sludge in a tailings dam, will be filtered using a new $420 million system and converted into less corrosive dry waste.

Prony executives say the dirty coal that powers the processing plant will be replaced by a flood of solar panels. Rare native plants will thrive in their shade.

Tesla promises to help transform Goro, which will undoubtedly cater well to environmentally conscious consumers. In July 2021, Tesla also signed a nickel supply agreement with Australia's BHP Billiton. The agreement promises to use blockchain technology to track the mineral supply chain.

Can this small Island in the South Pacific power Tesla's ambitions?

However, the Goro mine and other mines will not be able to provide Tesla with all the nickel it needs to go green.

Some of Tesla's cars use batteries made of nickel processed by giants such as Sumitomo Metal Mining. The Japanese company sources large quantities of nickel from places like the Philippines, Indonesia and Madagascar, where allegations of environmental and labor violations are widespread.

Part of the reason, Torke said, is that nickel ore is energy-intensive, and manufacturing electric vehicles emits almost twice as much carbon dioxide as cars that use fossil fuels.

Can this small Island in the South Pacific power Tesla's ambitions?

Tesla plans to produce batteries in Texas and Germany, and GM plans to produce batteries in Ohio. By taking nickel in places like New Caledonia or Australia and then transporting the mineral directly to its own battery-making plant, Tesla will be able to reduce its carbon footprint during transportation.

Can this small Island in the South Pacific power Tesla's ambitions?

To keep Goro alive, the French government has signed up about $200 million in loans and is likely to set aside roughly the same amount in the 2022 budget.

Can this small Island in the South Pacific power Tesla's ambitions?

Christopher Gygès, Minister of Economy, Foreign Trade and Energy of New Caledonia, said: "Entering the green nickel industry is not just about gaining a global competitive advantage. We also want to show that we are Europeans with the right labour and environmental standards. ”

The burden of colonization

Marie-Michèle Robert-Agourere, a laboratory technician at the Goro Coal Mine, is a typical example of the social benefits of coal mines. She grew up in a nearby village. The lab is made up of 8 women and 2 men, a ratio that could please socially conscious Tesla buyers.

"The boys don't like it because it requires a lot of skill and precision." Robert Agulay said of her work analyzing sediments.

Can this small Island in the South Pacific power Tesla's ambitions?

In Prony Resources' view, the mine helps hire Kanak people who might otherwise have a hard time finding jobs. Karnak's political leaders say about 40 percent of Karnak's young people are unemployed. Although the Karnaks can attend university in France, few indigenous people have advanced degrees.

In Goro, racial stratification is evident. Brill is the head of Prony Resources, a white man who grew up in France. Most of the mine's senior managers are white. Drivers and laborers were predominantly Kanak.

Nickel has been at the heart of New Caledonia's politics for centuries, and Tesla will have to deal with this heavy history.

In 1774, the British explorer James Cook sailed through Prony Bay, which faces the Goro Mine. By the mid-19th century, New Caledonia had become a french exile, and investigators had found nickel in the soil.

Can this small Island in the South Pacific power Tesla's ambitions?

French colonists soon plundered the karnak tribal lands and forced them into the reserves. Mining rights were handed over to white settlers.

The French brought in miners from Asia and other Pacific islands, changing the racial balance. In less than 75 years, the Kanaks have been reduced by about half due to disease, conflict, and the harsh realities of life under brutal colonial regimes.

In the 1980s, after armed clashes in New Caledonia killed dozens of people, Paris promised reforms. The Kanaks acquired a large stake in the nickel industry. But it wasn't until 2021 that Goro's processing plant was controlled by the local government.

Given Goro's environmental and political legacy, tensions are likely to return to the mine. Nickel is inextricably linked to the region's ethnic and colonial history.

Can this small Island in the South Pacific power Tesla's ambitions?

Goro still relies on an inherently dangerous process to produce nickel, which combines acid and slurry at high temperatures and pressures. Tesla notes in its sustainability report that the metal producers it works with are working on an industry benchmark called the Initiative for Responsible Mining Assurance, which covers everything from waste management to the rights of indigenous peoples.

As we all know, the Responsible Mining Assurance Initiative is stricter than any national mining law. At the end of November, however, Brill said he had never heard of it.

If Tesla can one day figure out ways to use other metals in batteries, reduce its dependence on nickel, and deprive Goro of a major buyer who needs a better approach, it could also abandon Goro.

Can this small Island in the South Pacific power Tesla's ambitions?

"There's no need for nickel or cobalt," Drew Baglino, Tesla's senior vice president, said on the October 2020 earnings call, "there's always an alternative." ”

In November, sabrina manique and Jacques Atti's wedding left Goro's long-standing disagreement brewing on a joyous occasion. Both had worked for Goro, but in the recent conflict, Artie helped with the blockade. When the mine opened again, he refused to return to what he thought was oppressed by the Kanaks. Ms. Mannick drove the truck back to Goro.

Can this small Island in the South Pacific power Tesla's ambitions?

"She's free to do what she wants, and I'm going to do what I want." Artie said on the wedding day.

The wedding was attended by both people who worked in Goro and those who opposed It. But even those who depend on mining for their livelihoods seem to doubt whether their tribal lands will be destroyed without any consequences.

"Green nickel is not environmentally friendly for us," said gilbert Artie, the groom's brother, "and tell that to Tesla, the big American company." ”

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