New Caledonia Votes Sunday on Whether to Break French Links

(Bloomberg) -- A French island in the Pacific Ocean that produces 10 percent of the world's nickel will vote Sunday on whether it wants to become an independent state or keep its links to France.

The question being asked of New Caledonia's roughly 175,000 voters is simple: “Do you want New Caledonia to receive full sovereignty and become independent?” All polls so far have predicted the archipelago will vote overwhelmingly to remain part of France.

While the French state claims to be neutral in the vote, both President Emmanuel Macron and Prime Minister Edouard Philippe have visited the islands in the past year and extolled the importance of relations between mainland France and New Caledonia -- at least in part with a view to the archipelago's nickel resources and its strategic location in Pacific waters.

“France would not be the same without New Caledonia,” Macron said during his May visit. The President will make a statement at 1 p.m. Paris time Sunday, a few hours after the results are slated to be announced.

Military Presence

The archipelago, more than 1,000 miles east of Australia and with a population of 260,000, became a French possession in 1853 during Europe's colonial rush and was used as a penal colony. In 1940, it was one of the first overseas French possessions to rally to Charles De Gaulle's Free French, becoming a major allied military base in the war against Japan. It still hosts France's main Pacific military presence, giving the country a seat at institutions and negotiations involving the Pacific.

Nickel was discovered in 1964, leading to European and Asian immigration that reduced the indigenous Kanaks to a minority in their own land, part of the reason for decades of political instability and even violence that began in the 1970's.

About 205,000 metric tons of nickel were extracted in 2016, making it the world's fourth largest producer, according to the U.S. Geological Survey. The 6.7 million tons of reserves are also the fourth largest, and account for about 8.5 percent of the world total.

The mining company Eramet -- in which the French state has a 25.6 percent stake -- is the biggest private employer on the archipelago.

Special Collectivity

Still, Nickel hasn't made the inhabitants rich. Its economic output per capita of 16,000 euros ($18,250) is about half that of mainland France, according to state statistical institute Insee.

The referendum is part of accords signed in 1998 between France's government and the Kanak independence movements. It follows a period of 20 years of progressive transfers of governing and representation powers. The current status of New Caledonia is that of a “special collectivity of France.” Under the agreement, another referendum on independence could be held by 2022.

Polls carried out by groups such as Harris, YouGov, and local companies all showed a minimum of 60 percent voting to remain part of France.

France has used referendums before to settle the destiny of its far flung overseas possessions. In 1974, the Comores voted for independence while the next-door Indian Ocean island of Mayotte chose to remain French. The Afars and Issas on the Horn of Africa voted for independence in 1977, becoming Djibouti.

To contact the reporter on this story: Gregory Viscusi in Paris at gviscusi@bloomberg.net

To contact the editors responsible for this story: Alan Crawford at acrawford6@bloomberg.net, Geraldine Amiel, Vidya Root

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