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The project northeast of Australia is being undertaken in an area of New Caledonia's main island administered by the indigenous Kanak people, who have injected $167 million via a company, SMSP.
Shaun Usmar, financial director of Xstrata-Nickel, praised the progress made so far on the plant, which will have a capacity of 60,000 tonnnes annually.
"It's on schedule. We expect to put the first ore into the furnace in mid-2012," he told the newspaper Nouvelles Caledoniennes.
He added that the project was two-thirds of the way to completion and had absorbed $2.2 billion of its total $3.8 billion price tag.
New Caledonia is home to vast quantities of nickel, an essential ingredient in making stainless steel, and the project is seen as part of a process of giving greater economic control to the indigenous people.
Separately, Usmar told AFP the project was crucial to the development of Xstrata, which had previously relied on acquiring existing projects for growth.
"During the (global financial) crisis (of 2008), nothing slowed down at Koniambo," he said.
"This will be the most profitable project in the world. Our cost of production should be between $2.3 and $2.5 per pound of nickel.
"Up till now, Xstrata has grown through acquisitions. With Koniambo we will for the first time have organic growth and prove that we are able to deliver a project in accordance with the projected time scale and budget.
"This is very important for the group," he said.
Following the launch of the plant, the Kanak-owned company will receive 12 per cent of dividends, with the proportion gradually rising as SMSP pays off a loan taken from Xstrata to provide its share of the finance.
After 25 years, SMSP will have a 51-per cent controlling stake in the project.