March 27, 2017 / 2:04 AM / 4 months ago

New Caledonia needs a sovereign wealth fund-French govt advisors

1 Min Read

SYDNEY, March 27 (Reuters) - A French government appointed panel of experts recommended the creation of a sovereign wealth fund in New Caledonia to help diversify an economy heavily reliant on nickel.

The report, presented to the French Prime Minister last month, said such a fund help offset the impact of weaker nickel prices and depletion of nickel reserves while supporting other areas of the economy.

Nickel prices have halved since mid-2014, making the South Pacific nation more reliant on subsidies from France.

The South Pacific nation is due to hold an independence referendum by 2018.

The mineral is crucial to New Caledonia as it accounts for about a fifth of its economy. It holds around a quarter of the world's reserves of nickel, used in everything from stainless steel to batteries. (Editing by Simon Cameron-Moore)

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