On this page:

• Summary
• Economy and GDP
• Trade with Australia

Summary

Nickel was discovered in New Caledonia shortly after the French annexed the territory in 1853. The first mining operations began in the 1870s and rapidly expanded as the global demand for nickel grew. There are now three metallurgy companies in the local nickel sector that provide over a quarter direct, indirect and induced of jobs for New Caledonians. Société Le Nickel, one of the three nickel mining companies, is the country’s largest private employer.

In the 1980-90s, it was believed the nickel mines would fund New Caledonia’s independence, enabling the country to sustain itself without financial assistance from France. However, none of the three smelters have turned a profit for years. Nickel prices have been volatile, and a prolonged price slump has combined with competition from low‑cost producers (especially Indonesia and the Philippines, which now dominates global supply) to undermine profitability for higher‑cost producers like New Caledonia. High electricity prices required to mine the nickel, including transport and labour costs, are also contributing factors to the industry’s decline. The question of who should own the mines and the revenue has also been a contentious issue with the indigenous Kanak population claiming they have been disadvantaged. The cost of transporting the ore to Europe, a lack of local processing capabilities, and political disruption has brought the industry to a stand-still.

Given its wide use in advanced alloys and defence applications, New Caledonia’s nickel resource is potentially an important strategic asset to France and the EU, given China’s large role in processing and refining the world’s nickel, lithium and germanium supplies. 

The all-consuming question of independence (See: Hot Topic) is a persistent distraction for the Government of New Caledonia when futureproofing the economy is a must. Amongst the population there is also a large divide between wealthy and poor which has contributed to an ethnic divide. Many of New Caledonia’s urban dwellers are of French origin while the indigenous Kanaks live mostly in outer urban and rural areas. The price of goods is markedly more expensive in the country and there are limited indigenous employment and higher education opportunities.

In June 2023, New Caledonia adopted a draft law for a ten-year ban of deep-sea mineral resource exploration and exploitation within the territory’s Exclusive Economic Zone. While this was an admiral act of environmental conservation, it further limits options for New Caledonia’s economy.

Economy and GDP

Nickel products account for over 85% of merchandise exports. Financial transfers from France are also an important source of income accounting for another 20% of local GDP. This covers expenditure on defence, domestic security, primary and secondary education, and public services as well as the salaries, social security contributions, and pensions of state employees. Tourism is an important sector with eco-tourism and the cruise industry re-gaining momentum since the COVID pandemic ended. Major imports include refined petroleum, electrical and mechanical machinery, cars, and pharmaceutical products.

Trade with Australia

France, Japan, Australia, and New Zealand are important for New Caledonia’s tourism sector. Flights from the east coast of Australia take 2-3 hours, and nearly 23,000 Australian tourists visited New Caledonia in 2025 - approaching the pre‑crisis record of 30,000+ in 2023. Australian tourists represent around 30–40 % of total inbound tourists. New Caledonians also visited Australia in numbers, particularly the Gold Coast, which has a sister city relationship with Noumea. Tourism is buffering the economic impact of the faltering nickel sector, which makes instances of civil unrest even more damaging.

Australian goods exports to New Caledonia are modest compared to our major trading partners but represent a steady commercial link, including mineral fuels and oils, machinery, equipment and food products. Imports from New Caledonia into Australia are very small in value by comparison - typically AUD$1–2 million per month - which reflects the relative size and structure of the two economies. Australia is a large producer of goods in demand in Pacific markets, while New Caledonia’s small manufacturing base produces few goods for export. Around 1,700 Australian companies do business in or with New Caledonia, especially in the construction, engineering, and professional services sectors, which adds to our business ties and economic connection.

For further information on New Caledonia’s economy, see the resources below:

Video

1. New Caledonia unrest: What impact on the economy?

Articles

1. Country Economic and Trade Data – Power BI Report Server (dfat.gov.au)
2. France sets end March deadline for New Caledonia nickel deal | Reuters
3. Nickel and Dimed: The Green Metal Gamble in New Caledonia (harvard.edu)
4. How Vanuatu’s COVID-19 policies can catapult economic recovery through the private sector in 2022 – Devpolicy Blog from the Development Policy Centre
5. Aussies flock to New Caledonia in record levels in 2023 (karryon.com.au)
6. A swimming ban in an island paradise has impacted local tourism. But are shark nets and culling the answer? – ABC News
7. Indonesia harnesses Chinese capital and innovation to dominate world nickel production | The Strategist (aspistrategist.org.au)
8. Demanding the Future: Navigating the Pacific's Youth Bulge (lowyinstitute.org)

Reviewed February 2026