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Issue Name
MEDIA RELEASE
December 9, 2002
Contact: Stephanie Gorson Fried, 808 262-7128
Stephanie_Fried@environmentaldefense.org
CONTROVERSIAL NICKEL MINE
SHUT DOWN PENDING REVIEW
Indigenous Leaders, Environmentalists, Financial Analysts Raise Environmental
Concerns And Questions About Inco's Corporate Credibility
(Honolulu) The future of the controversial Canada-based Inco company's
Goro Nickel mine in New Caledonia is in question today following the announcement
that it was ceasing Goro Nickel operations for the next six to twelve
months to conduct a comprehensive review of the project. News of potential
45% cost overruns, the company's failure to secure over $350 million dollars
in French government tax breaks and loans by year's end, and analyst doubts
regarding the credibility of Inco management sent stock prices tumbling.
Inco had previously told investors that French subsidies - dependent upon
approval of the company's extraordinarily weak Environmental Impact Assessment
- and a Japanese partnership would be in place before the end of 2002.
The company's Environmental Impact Assessment was the subject of a recent
Environmental Defense analysis (www.environmentaldefense.org), which highlighted
French agency assessments of the mine's potential to dump mercury, toxic
forms of chromium and aluminum onto the country's fragile reefs. Our analysis
also flagged the underreporting of potential health risks to mine workers
and the apparent lack of information provided to shareholders about significant
financial and environmental risks associated with the mine in Inco's last
annual 10K Securities and Exchange Commission report, published in early
2002.
New Caledonia, also called Kanaky, is a territory of France identified
by Nature as one of the world's top "biodiversity hotspots"
with 75% of its plants found nowhere else in the world, containing one
of the world's largest lagoon and reef systems. Foreign contractors had
begun constructing the $1.4 billion Inco nickel-cobalt mining facility,
slated to use an unproven, dangerous pressure acid leach technology in
the midst of botanical reserves in an area adjacent to fragile reef systems
proposed for nomination as a World Heritage Site. However, in the face
of stiff indigenous and environmentalist opposition to its plans and in
the aftermath of this year's failure to obtain French public finance,
the company's plans have faltered.
"Given recent corporate scandals, we hope that Inco has not misled
shareholders about the risks associated with the Goro Nickel operation.
We are gratified to see that the French Ministry of Finance has not rushed
to provide subsidies for this controversial operation. The French Development
Agency, AFD, however, has certainly gone out on a limb by making the first
portion of its planned loans. The time has come for publicly funded agencies
to require basic environmental and indigenous rights standards for projects
they support," said Environmental Defense senior scientist, Stephanie
Gorson Fried. "As these recent cost overruns and scientific assessments
show, underwriting the Goro Nickel mine not only produces unacceptable
and environmental risks, but it is also a financially unsound use of public
funds."
Environmental Defense, a leading national nonprofit
organization based in New York, represents more than 300,000 members.
Since 1967 we have linked science, economics, and law to create innovative,
equitable, and cost-effective solutions to the most urgent environmental
problems.
http://www.environmentaldefense.org/home.cfm
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