Can a Sustainable Mining Experiment in New Caledonia Power Tesla’s Ambitions?

Nickel is vital to electric car batteries, but extracting it is dirty and destructive. A plant with a turbulent history in New Caledonia is about to become an experiment in sustainable mining.,

Nickel is vital to electric car batteries, but extracting it is dirty and destructive. A plant with a turbulent history in New Caledonia is about to become an experiment in sustainable mining.


By Hannah Beech

Photographs by Adam Dean

Dec. 30, 2021

GORO, New Caledonia — From the reef-fringed coast of New Caledonia, the Coral Sea stretches into the South Pacific. Slender native pines, listing like whimsical Christmas trees, punctuate the shoreline. The landscape, one of the most biodiverse on the planet, is astonishingly beautiful until the crest of a hill where a different vista unfolds: a gouged red earth pierced by belching smokestacks and giant trucks rumbling across the lunar-like terrain.

This is Goro, the largest nickel mine on a tiny French territory suspended between Australia and Fiji that may hold up to a quarter of the world’s nickel reserves. It also poses a critical test for Tesla, the world’s largest electric vehicle maker, which wants to take control of its supply chain and ensure that the minerals used for its car batteries are mined in an environmentally and socially responsible fashion.

Tesla’s strategy, the largest effort by a Western electric vehicle maker to directly source minerals, could serve as a model for a green industry confronting an uncomfortable paradox. While consumers are attracted to electric vehicles for their clean reputation, the process of harvesting essential ingredients like nickel is dirty, destructive and often politically fraught.

Because of its nickel industry, New Caledonia is one of the world’s largest carbon emitters per capita. And mining, which began soon after New Caledonia was colonized in 1853, is intimately linked to the exploitation of its Indigenous Kanak people. The legacy of more than a century of stolen land and crushed traditions has left Goro’s nickel output at the mercy of frequent labor strikes and political protests.

If done right, the approach by Tesla, which has the capacity to churn out close to a million cars a year, could lead the way in setting global standards for the electric vehicle revolution, in yet another convention-defying move by the company’s enigmatic founder, Elon Musk. It also provides Western car companies a path to begin sidestepping China, which currently dominates the production of electric vehicle batteries.

If done wrong, Goro will serve as a cautionary tale of how difficult it is to achieve true sustainability. “Going green” or “acting local” are nice bumper stickers for a Tesla. Meeting these ideals, however, will require not just cash and innovation but also savvy about one of the most remote places on earth, a scattering of French-ruled islands hovering on the cusp of independence. Some of the world’s biggest nickel miners have tried to profit at Goro — and failed.

“We’re this tiny little thing in a complicated jurisdiction,” said Antonin Beurrier, the chief executive of Prony Resources, the consortium that took ownership of the Goro nickel facility this year. “And we have to reinvent the business.”

ImageA mine truck driver at the beginning of his shift. Nickel is increasingly in demand for its use in batteries for electric vehicles, and New Caledonia may hold up to a quarter of the world's reserves.
A mine truck driver at the beginning of his shift. Nickel is increasingly in demand for its use in batteries for electric vehicles, and New Caledonia may hold up to a quarter of the world’s reserves.
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Transporting nickel ore across a landscape ravaged by mining. Electric vehicles have a green reputation, but extracting the materials needed to build them is a dirty process.
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Enormous vehicles at the nickel mine. New Caledonia is one of the world’s largest carbon emitters per capita because of its nickel industry. The Prony mine, with the help of its new customer Tesla, is hoping to change that.

Reinventing business is practically Mr. Musk’s mantra, whether pursuing automated driving or space travel. Tesla has positioned itself as the ideal, perhaps only, force that can transform this loss-making mine plagued by political and environmental crises.

Mr. Musk has insisted, unlike any other major United States automaker, on buying a large share of the major metals he needs for car batteries directly from mines around the world — a strategy to ensure that he has all that he needs as vehicle production increases and a global competition for these materials intensifies. A Tesla manager who used to work at the Goro facility helped shepherd his plan, with the company securing a deal in October to directly purchase up to one-third of Goro’s nickel over the next five years.

The vision of what Goro could become is enticing. Carbon emissions would plummet, with renewable energies powering the nickel processing facility. Toxic liquid waste, known as tailings, would be packaged as a neat, dry residue. Local communities would be partners in deciding how best to profit from natural resources on tribal land.

Pacific Ocean

NEW CALEDONIA

Coral

Sea

La Foa

Noum?a

Goro

NEW CALEDONIA

AUSTRALIA

50 miles

By The New York Times

In a sustainability report, Tesla said all the right things. By working directly with a mine, rather than buying nickel from a middleman, the company could “address sustainability issues such as biodiversity impact, energy consumption, human rights and tailings management.”

“Tesla works directly with mineral producers and refiners that are aligned with our mission and are committed to supplying sustainably and responsibly sourced materials,” the report said.

Tesla still depends on metals from mines in other countries dogged by allegations of environmental and human-rights abuses. And as the world shifts from fossil fuels to renewable energies, the race to lock up access to these minerals has left companies scrambling. Earlier this year, Mr. Musk wrote on Twitter that his company’s “biggest concern” for expanding battery production was ensuring an adequate nickel supply. (Nickel is used to cram more energy into batteries.)

Following Mr. Musk’s lead, Tesla employees rarely speak to the media and have said little about the New Caledonia deal. For automakers that need minerals and materials sourced from all over the world, any scrutiny of their supply chain, even of new efforts to clean things up, could be unwelcome. Car companies, for instance, have been criticized for the use of cobalt mined in unsafe conditions, sometimes by children, in the Democratic Republic of Congo.

If any place can pull off the feat of green nickel, it is New Caledonia. Because of its status as a French overseas territory, New Caledonia, with a population of 270,000 people, is bound by rigorous European environmental and labor standards. Its own government — led by a coalition representing Indigenous Kanaks, generations of European settlers and newer French arrivals, as well as Asians and Pacific islanders who came to work the mines — is also eager to protect local rights.

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The Goro tribal area. The landscape of New Caledonia, a series of remote islands in the South Pacific, is stunningly beautiful away from the nickel mining.
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New Caledonia’s president, Louis Mapou, standing, talked to guests after giving a speech in Noum?a, New Caledonia’s capital, in November. He took power after the Goro conflict and is the territory’s first Kanak president.
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A playground in a poor neighbourhood in Noum?a. The wealth gap in New Caledonia is significant, with the Indigenous Kanaks often at the bottom.

Other major nickel producers, like Indonesia and the Philippines, have loose regulations and even looser oversight. They can produce nickel far more cheaply than New Caledonia can. To compete against these low-cost rivals, New Caledonia is now positioning itself as a supplier of top-grade nickel for rechargeable batteries rather than the cheaper product used for stainless steel.

“New Caledonia, in its way of exploiting its ore, is perceived as a country which contributes to the fight against global warming,” the territory’s president, Louis Mapou, said in an interview. “We have very high production costs in New Caledonia, it is true, but we respect human rights, respect the rights of local people and respect the environment.”

Even with guardrails in place, natural resource extraction remains a sensitive issue in New Caledonia. Nickel prices are up by about 25 percent this year, reflecting the mineral’s importance in the campaign to move away from fossil fuels. But so far, that has not led to greater profits for miners.

Goro’s previous owner, the Brazilian mining giant Vale, was desperate to rid itself of the mine.Tensions over who would buy the nickel processing plant led to protests that forced Goro to shut for months, the kind of supply chain disruption that could be disastrous for Tesla. The conflict also triggered the fall of New Caledonia’s government earlier this year.

“In the history of nickel in New Caledonia, a battle exists between the multinational and the local populations, and there is also the colonial history,” said Mr. Mapou, who took power after the Goro conflict and is the territory’s first Kanak president. “With Tesla, with the new ownership, we have a compromise now that makes it possible to open the Goro plant, but it remains fragile.”

The coastal road to Goro, meandering past a bay studded with colorful coral, is littered with charred cars. The dozens of burned vehicles are detritus from the monthslong struggle that idled the mine and led to the collapse of New Caledonia’s government in February. And they are a visceral reminder of the tense politics that could stymie Tesla’s efforts to secure a steady supply of nickel.

Andr? Vama was one of hundreds of Kanaks who barricaded the road with burning tires and vehicles this year, strangling the mine’s operations.

“From the start, we have been against this mine,” said Mr. Vama, who is a leader of a local environmental alliance. “This is our national patrimony, our assets, and the Kanaks, who are victims of history, are not in control of what should be ours.”

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Traces of the recent conflict are still visible on the way to the Prony mine, in the form of charred vehicles. Hundreds of Kanaks barricaded the road with burning tires and cars.
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Andr? Vama, 63, was one of those protesting. “From the start, we have been against this mine,” he said. Local opposition stems from both political concerns and environmental fears.
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Photos of previous mine dispute protest encampments line Mr. Vama’s wall.

Local opposition to the mine draws both from political concerns and environmental fears.Goro’s processing plant, which depends on pumping acid at high pressure, began operations in 2010, after years of wrangling over land rights with local Kanaks. Within five years, the facility suffered five chemical spills.

The biggest leak, in 2014, led to 100,000 liters of waste gushing into a creek. Thousands of fish died, according to environmental groups.

New Caledonians were even more spooked when another mine run by Vale was the site of one of the deadliest disasters in recent history. In 2019, a tailings dam at a Vale iron ore mine in Brazil burst and inundated a workers’ canteen and neighborhood homes, killing 270 people. The Vale management in New Caledonia, most of whom now work for Prony Resources, said that the Goro waste dam was differently designed. But the optics were alarming.

“Clearly, we had work to do to show that safety and sustainability are our top priorities,” said Denis Loustalet, the chief sustainability officer for Prony Resources. “Even one small accident is too much.”

Goro has repeatedly been a flash point in New Caledonia’s decades-long struggle for independence. In 2014, after the spill, Kanaks set fire to Goro’s facilities, which were linked in local minds to a colonial authority. The mine suspended production for more than a month. Vale estimated the damage at $30 million.

The most recent protest began late last year during a fraught political season when New Caledonians were voting in an independence referendum. When the “no” vote narrowly prevailed, Kanaks took to the streets. Vale had already announced that it wanted out of New Caledonia and was negotiating to transfer ownership to, among others, Trafigura, a scandal-tainted international commodity trader.

Largely excluded from the original Goro negotiations, the Kanak community demanded more control this time. With provocative rumors about Vale’s intentions spreading, Kanak workers and villagers stormed the Goro complex, again setting facilities on fire.

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An overview of the mine site. Goro’s earth is rich in nickel and cobalt, key ingredients in the lithium-ion batteries most commonly used for electric vehicles, but extracting them takes a lot of energy.
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Workers repairing a motor at the nickel processing plant. The dirty coal that powers the processing plant will be replaced by a large collection of solar panels, Prony executives say.
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The nickel processing plant. Mining, which began soon after Europeans arrived in New Caledonia, is intimately linked to the exploitation of its Indigenous Kanak people.

Police officers were injured. The destruction, blockade and subsequent mine closure again cost the mine complex tens of millions of dollars.

One of the instigators of the violence, according to the authorities, was a tribal chief who is the elder brother of President Mapou.

Months of negotiation led to a compromise in March: 51 percent of Goro’s new ownership consortium, Prony Resources, is controlled by the provincial government, mine workers and local members of the community. Trafigura has 19 percent, rather than the 25 percent it was first slated to take.

The Tesla deal, announced half a year later, was greeted with jubilation by Kanak political leaders, who say that it will force Goro to adhere to high standards.

The Tesla executive who brokered the deal is Sarah Maryssael, the automaker’s group manager for the responsible sourcing of battery metals. An Australian engineer, she previously worked at Goro and knew how to navigate New Caledonia’s political complexities, according to the Prony chief executive, Mr. Beurrier, and local politicians.

“If we didn’t have the conflict, with the Kanaks standing up, we would not be where we are today,” said Roch Wamytan, the president of New Caledonia’s Congress. “Now we can sleep tranquilly, because we know the whole world is watching to make sure that we take green nickel seriously.”

“The Tesla deal made that happen,” he added.

A brief lesson in hydrometallurgy: Goro’s earth is rich in nickel and cobalt, key ingredients in the lithium-ion batteries most commonly used for electric vehicles. To extract the useful minerals takes a lot of energy. That means a lot of hazardous emissions.

First, giant excavators, loaders and trucks running on fossil fuels scoop up the earth and trundle it away. Then the soil slurry is fed into a coal-fired facility that uses high-pressure blasts of sulfuric acid at high temperature to extract nickel and cobalt.

Prony Resources is promising to halve its carbon emissions by 2030 and become carbon neutral 10 years after that. Waste from the plant, which is currently held in a tailings dam as a toxic sludge, will be filtered and transformed into a less corrosive dry waste, using a new system with $420 million in investment.

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A view of wet tailings, toxic sludge waste from the mining process, at the nickel mine in Goro.

The dirty coal that powers the processing plant will be replaced by a large collection of solar panels, say Prony executives. Rare native plants will flourish in their shade.

Tesla’s vow to help transform Goro will no doubt play well with the carmaker’s environmentally conscious consumers. In July, Tesla also signed a nickel supply deal with BHP Billiton in Australia. The agreement came with promises to use blockchain technology to trace the mineral supply chain.

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

Some of Tesla’s cars run on batteries made with nickel processed by giants like Sumitomo Metal Mining. The Japanese firm has sourced much of its nickel from places like the Philippines, Indonesia and Madagascar, where allegations of environmental and labor breaches are rife. (Sumitomo did not respond to requests for comment.)

And in part because nickel mining is so energy intensive, manufacturing electric vehicles emits nearly twice as much carbon dioxide as does producing cars run on fossil fuels, according to Trafigura.

There’s another stumbling block in efforts to streamline the battery-making process. Most of the nickel destined for electric vehicle batteries, Goro’s included, goes to one place: China.

After more than a decade of state encouragement, China dominates battery making. For now, no Western carmaker — not Tesla, Ford or Volkswagen — can charge all its electric cars without Beijing. Europe controls less than 5 percent of the process, according to Trafigura. The United States is barely a player.

Tesla has plans to produce batteries in Texas and Germany and General Motors in Ohio, which would help avoid an overreliance on China. By securing nickel in places like New Caledonia or Australia, then sending the mineral directly to its own battery-making facilities, Tesla would be able to reduce its shipping carbon footprint.

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Taking a sample of processed nickel before the bag is sealed and shipped.
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Loading sacks of processed nickel into containers at the Goro plant.
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Marie-Mich?le Robert-Agourere, a lab worker, testing samples at the nickel mine. “The boys don’t like it because it requires a lot of finesse and precision,” she said of her work.

The China factor also plays into Pacific geopolitics. New Caledonia is the only part of Melanesia, an arc of islands in the South Pacific, that is not heavily under Beijing’s economic and political sway. In each of three failed independence referendums, the most recent this month, French loyalists argued that breaking free would mean New Caledonia trading one colonial master for a de facto one in China.

To keep Goro afloat, the French government has signed off on about $200 million in loans and will most likely allocate roughly the same amount in next year’s budget.

“The push into green nickel isn’t just for global competitive advantage,” said Christopher Gyg?s, New Caledonia’s minister for economy, foreign trade and energy. “We also want to show that we are Europeans with the right labor and environmental standards.”

Mr. Gyg?s, who campaigned against New Caledonian independence, added: “We are not China, we are not Indonesia, we are not the Philippines. We are France in the Pacific.”

Marie-Mich?le Robert-Agourere, a laboratory technician for Goro, is a poster child for the social benefits of the mine. She grew up in a nearby village. The lab is staffed by eight women and two men, the kind of ratio that might please a socially conscious Tesla buyer.

“The boys don’t like it because it requires a lot of finesse and precision,” Ms. Robert-Agourere said of her work analyzing sediment.

As Prony Resources sees it, the mine is helping employ Kanaks who might otherwise struggle to find jobs. About 40 percent of Kanak youth are unemployed, Kanak political leaders say. Even though Kanaks can attend universities in France, few Indigenous people have advanced degrees.

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A wealthy neighborhood in Noum?a.
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Tagging a calf on a farm in La Foa. The great grandfather of the farm’s owner settled in New Caledonia in 1890 when he left Brittany to work at the French penal colony that was then on the territory. Many of the original French settlers, known as Caldoche, raise cattle in New Caledonia.
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An outdoor gym on a coastal promenade in an affluent neighbourhood in Noum?a. Sharp disparities in wealth in New Caledonia are chiefly along racial lines.

The racial stratification is apparent at Goro. Mr. Beurrier, the head of Prony Resources, is white and grew up in France. Most of the mine’s top managers are white. The drivers and laborers are mainly Kanak.

For centuries, nickel has been at the heart of politics in New Caledonia, and Tesla will have to contend with this freighted history.

In 1774, James Cook, the British explorer, sailed past Prony Bay, which fronts the Goro mine. By the mid-19th century, New Caledonia served as a penal colony for the French, and surveyors discovered nickel in the soil.

French settlers soon robbed the Kanaks of their tribal lands and forced them onto reservations. Mining concessions were handed to white settlers.

The French brought in mine workers from Asia and other Pacific islands, shifting the ethnic balance. In less than 75 years, the population of Kanaks dwindled by roughly half, as a result of disease, conflict and the harsh reality of life under an abusive colonial power.

After armed conflict in New Caledonia claimed dozens of lives in the 1980s, Paris promised change. Kanaks were given significant stakes in the nickel industry. But it wasn’t until this year that Goro’s processing plant came under majority local ownership.

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A subsidized housing project in Noum?a. About 40 percent of Kanak youth are unemployed, Kanak political leaders say.
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Families living in slum housing in Noum?a unpacking food boxes, including packages of products close to their expiration date donated by supermarkets.
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Jacques Atti, left, in dark gray T-shirt, with relatives shortly before his wedding in Goro. He and his bride, Sabrina Manique, both worked at the mine before the recent protest. She returned after it re-opened; he declined to do so.

Given Goro’s environmental and political legacy, it appears likely that tensions will return to the mine. Nickel is too entwined in the territory’s racial and colonial history.

Goro still depends on an inherently dangerous process to produce nickel, that conjoining of acid and slurry at great heat and pressure. Tesla noted in its sustainability report that the metal producers it is partners with are committing to an industry benchmark called the Initiative for Responsible Mining Assurance, which covers everything from waste management to Indigenous people’s rights.

IRMA, as it is known, is tougher than any national mining law. Mr. Beurrier, however, said in late November that he had never heard of it.

Tesla might also step back from Goro one day, if it comes up with a way to use other metals in its batteries, reducing its reliance on nickel and leaving Goro without a dominant buyer that demands better practices.

“It doesn’t need to be nickel or cobalt,” Drew Baglino, a Tesla senior vice president, said in an earnings call in October. “There’s always another option.”

Goro’s enduring divisions simmered at a joyful occasion last month, the wedding of Sabrina Manique and Jacques Atti. Both had worked at Goro, but during the recent conflict, Mr. Atti helped with the blockade. When the mine opened again, he declined to return to a place that he equated with Kanak oppression. Ms. Manique is back at Goro driving a truck.

“She is free to do what she wants, and I will do what I want,” Mr. Atti said, on his wedding day.

The wedding guests were a mix of those who worked at Goro and those who campaigned against it. But even those who depend on the mine for their livelihoods seemed skeptical that their tribal land could be torn up without consequences.

“Green nickel is not green for us,” said Gilbert Atti, the groom’s brother. “Tell that to Tesla, that big American company.”

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Mine truck drivers head to their trucks at the beginning of a shift.

Eric Lipton contributed reporting.

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