New Caledonia's economy: nickel's swings, carried by services

What the riots did to output and jobs

The economy had been growing again after the pandemic, by 3.5% in 2022 and 2.8% in 2023, when the riots of May 2024 broke it. The rapid accounts that the ISEE, the Institut d'émission d'outre-mer and the French development agency compile together estimate that gross domestic product fell 13.5% in 2024, back to a level between those of 2014 and 2016. Output per head fell from 4.0 million CFP francs in 2023 to 3.5 million in 2024, below its level of 2017. For comparison, growth had averaged 3.7% a year from 2000 to 2011 and 1.3% a year from 2012 to 2018.

The damage came through destroyed businesses and lost jobs. RNZ reported more than €2 billion of material damage, and Nouvelle-Calédonie la 1ère counted more than 800 businesses affected since 13 May 2024. Private salaried employment fell by an average of 11.8% in 2024, more than 8,000 jobs, and by a further 6.8% in 2025, another 4,050. The territory had 54,958 private salaried jobs in the last quarter of 2025, about 13,000 fewer than in 2023.

The first months of 2026 brought the first signs of a turn. The IEOM's business climate indicator, centred on a long-run average of 100, rose to 99.3 in the first quarter of 2026 from 91 at the end of 2025, hiring intentions turned positive for the first time since 2023, and card payments and consumer credit rose while new car registrations jumped 34.9%. Household distress went on rising at the same time: repayment incidents were up 19.8% and over-indebtedness files 23.7% on a year earlier.

Where the money is actually made

New Caledonia's economy is mostly services. The ISEE's estimate for 2024 splits value added as follows.

The share of nickel moves with the metal's price and with how much the plants produce. In 2022, with good prices and volumes, it was 14% of GDP; in 2024 the Koniambo plant stopped in February, the Prony plant was shut for more than six months and mine sites were blockaded and damaged, and the share fell to 5%. Construction, long carried by the plants and by housing, has shrunk from 13% of value added in 2012 to about a tenth.

Household consumption is the main component of demand, about two thirds of GDP. Investment rose to a peak of 43% of GDP in 2010 to 2012, while the nickel plants and much housing were being built, and fell back to 23.7% in 2024.

Money from France holds much of this up. The French state pays for defence, security, primary and secondary education and its own public services, along with its staff's salaries and pensions and grants to the territory and provinces. The IEOM estimated these recurring transfers at 220 billion CFP francs in 2025, 23.3% of GDP. After the riots the IEOM wrote that without the state's large financial support the territory could not have kept its public services running in 2025, including unemployment benefit, the health system, electricity production and pensions.

How the nickel is mined

New Caledonia's ore is oxidised, of two kinds: yellow laterites with grades around 1.5% nickel, and saprolites below them at 1.8 to 2.4%. Both are mined in open pits. By the US Geological Survey's estimate, as cited by the IEOM, the territory held about 5% of the world's nickel reserves in 2025, out of more than 139 million tonnes; its share of the metal present in the ground, counted as resources, is larger, and Wikipedia puts it at about 25%.

The mining domain, concessions and exploration permits together with provincial reserves, covered 254,000 hectares in 2025, 14% of the land. The Société Le Nickel held about 51% of the titles, the SMSP 18%, the Ballande group 14% and Prony Resources 8%. Smaller miners and contractors extract ore under the big holders' titles or their own.

Extraction recovered by 24.0% in 2025 after the blockades of 2024 but was still 38.6% below 2023, in tonnes of contained nickel. A quarter of all private-sector jobs, counting indirect ones, depended on nickel in 2019 by the ISEE's estimate.

Which plants turn the ore into metal

Until 2024 three plants in the territory processed ore, and a fourth abroad took ore from New Caledonia.

The SLN plant is more than a century old and was the only plant turning ore into metal until 2010. Prony Resources, formerly Vale NC, passed to a consortium in 2021 after the Brazilian group Vale sold its 95%. Koniambo began producing in 2013 and never reached its capacity of about 50,000 tonnes a year: its best year, 2023, gave 27,200 tonnes, and Glencore withdrew. The analyst Paco Milhiet put Glencore's losses at about USD 9 billion over a decade and the jobs lost at more than 1,200.

In 2025 the plants produced 72,213 tonnes of contained nickel, up 35.4%: 36,031 tonnes as nickel hydroxide cake and 36,182 tonnes as ferronickel, the ferronickel half of its 2023 level of 71,912 tonnes.

Why the smelters have struggled to make money

The IEOM lists the structural problems of the two remaining metallurgists: energy and labour costs well above those of competitors, and access to ore. The world market has also moved east. Asian output of primary nickel rose from 33% of world production to 80% between 2009 and 2024, much of it lower-grade nickel pig iron, and world production reached 3.9 million tonnes in 2025 against 2.0 million in 2015. On the London Metal Exchange nickel averaged USD 15,150 a tonne in 2025, 10% less than in 2024, while LME stocks rose 61.4% in twelve months.

The territory and the state have answered with taxes, aid and a plan. In February 2024 the Congress imposed a tax on ore exports and a royalty on extraction, whose rates a resolution cut in early 2026. The pact of economic and social refoundation between the state and New Caledonia commits to a transformation plan for the sector from the first half of 2026: the state says it will no longer cover the plants' operating losses, will support the sector through a transition once the plan is agreed and will help pay for the infrastructure meant to decarbonise the electricity supply and lower its cost to the plants. The ore and the plants have a climate cost too: New Caledonia emitted 55.25 tonnes of CO2 per person in 2019, against 4.81 for France.

How the territory's own finances were kept afloat

The riots hit public budgets that were already strained. The social security funds for health, unemployment and pensions had been running deficits, and the provinces hold large stakes in the loss-making nickel companies. Contributions and taxes fell after May 2024 while spending on unemployment rose.

Paris filled the gap with loans more than gifts. In 2024 the state granted three repayable advances worth 46.6 billion CFP francs and two subsidies worth 8.9 billion, and in 2025 a loan guaranteed by the state refinanced the advances and paid for the social accounts, lost tax revenue and the deficit of the electricity system. Tax revenue had already fallen from 207 billion CFP francs in 2023 to 177.3 billion in 2024, and it fell again in 2025, by 12% to 155.4 billion.

The territory's debt rose to match. Measured against its recurrent revenue, the collectivity's own debt stood at 92% in 2019, 337% in 2024 and 371% in 2025, far above the 90% ceiling the French development agency recommends, and its outstanding debt rose from 123.9 billion to 166.9 billion CFP francs during 2025. Its cash reserve fell to two days of spending at the end of 2025, against the 30 to 60 days the agency advises.

Trade with France follows the same pattern. Mainland France supplied 42.5% of the territory's imports in 2024, 106.5 billion CFP francs, against 42.4 billion from Singapore and 26.2 billion from Australia, and took 6.1% of its exports, mostly ferronickel and essential oils.

What New Caledonia sells and buys

Exports are nickel. The analyst Paco Milhiet put nickel at roughly 90% of the territory's exports in July 2026. In 2025 metallurgical exports reached 70,680 tonnes of contained nickel, up 25.7%, worth 91.3 billion CFP francs, and Asia took 92.6% of them, with China, South Korea and Japan the main buyers. Raw ore exports, to South Korea, Japan, China and Australia, came to 67,614 tonnes of contained nickel, up 8.9%.

Imports far exceed exports. In 2025 exports paid for 60.3% of imports, 5.4 points more than a year earlier, by the ISEE's measure of the coverage rate. Food made up about 20% of imports by Wikipedia's estimate, and much of the land is unsuited to farming. Agriculture produces about 2% of value added, and FAOSTAT counts yams, taro, plantains and coconuts among the territory's crops.

How tourism and the lagoon earn

Tourism is small next to nickel, an estimated 4% of GDP in 2025. The territory received 58,421 staying tourists in 2025, down 1.6% on 2024, and 250,924 cruise passengers, up 31.0% but still below the 343,703 of 2023. Visitors from mainland France made up 42% of arrivals in 2025, Australians 20% and visitors from Wallis and Futuna 14%, and the IEOM describes most of it as affinity tourism, travel to see relatives and friends. Visitor spending was estimated at 22.6 billion CFP francs in 2025.

Flights fell away after the riots. International air passengers in 2025 were 44% of their 2019 level, Japan visitor numbers fell 87.6% after the Tokyo route closed in 2024, and domestic air traffic fell to a historic low. Tourism employed 4,494 salaried staff in 2025, up 7.0%. The first quarter of 2026 brought 14,062 visitors, 45.4% more than a year before.

What the CFP franc and local rules add

New Caledonia uses the CFP franc, issued by the IEOM, which was pegged to the euro at 119.3 francs to one euro as of May 2020. Many economic rules are set in Nouméa. The government fixes regulated prices and draws up the import programme, and labour law and external trade were among the first powers transferred, on 1 January 2000.

A law on the protection of local employment, in force since 14 February 2012, gives priority in hiring, at equal qualification, to New Caledonian citizens and then to people with a minimum period of residence, from 3 to 10 years depending on the sector. Authorisations to recruit from outside fell from 2,662 in 2023 to 823 in 2024 and recovered to 1,080 in 2025. On 12 May 2025 the government and eight trade unions signed a framework agreement on social and tax reforms, including a plan to balance the social accounts within five years.