France: Behind the Nickel Curtain

Quietly but firmly, the U.S. has taken the unusual step of declaring economic warfare against a company that is supported by a friendly government. The company is France's Le Nickel, whose sales of $53 million make it the world's third largest producer (after Canada's International Nickel and Falconbridge Nickel) of a scarce, strategically important metal. While the two governments are squabbling over the company's activities, the protagonists range far beyond the Quai d'Orsay and Foggy Bottom. They include Fidel Castro, Mao Tse-tung, former French Premier Rene Mayer and those storied bankers, the Rothschilds.

Buying from Cuba. At issue is a U.S. order, invoked in August by the Treasury's Office of Foreign Assets Control, that effectively bans U.S. imports of any products containing Le Nickel's metal. In the past month customs inspectors in New York City and elsewhere have impounded six shipments of French stainless steel containing nickel that had presumably been supplied by Le Nickel.

Washington says that it has banned Le Nickel products from the U.S. because the company made a deal in July to buy 33 million Ibs. of nickel oxide from Castro's Cuba. The ban is based on the U.S. law prohibiting imports of products made from Cuban materials. Compounding the affront to the U.S. is the fact that Le Nickel agreed to purchase its nickel oxide from Cuba's Nicaro plant, a rich source that had been owned by the U.S. Government and operated by National Lead Co. until Castro expropriated it in 1960.

Le Nickel is backed by some powerful forces. While the Cuban deal was being negotiated, the company's boss was Chairman Rene Mayer, who retired to the post of honorary chairman in January. The company is subsidized by the French government and controlled by the French Rothschilds, who are particularly close to Prime Minister Georges Pompidou, formerly the chief aide to Guy de Rothschild. Last month Guy de Rothschild and his brothers, owners of 10.6% of Le Nickel through several companies, carried out a complex exchange of stock to give them firmer control.

Proof & Protests. The French contend that they were forced into the Cuban deal almost by an act of God. Le Nickel's main mines are in far-off New Caledonia, but a drought there cut the necessary supply of hydroelectric power and forced the company to look elsewhere for nickel oxide. Before turning to Castro, they tried to buy supplies from the 166,761-ton U.S. Government nickel stockpile, but Washington turned them down. Authorities of both Le Nickel and the French government buzz that the U.S. has another, more devious reason for boycotting Le Nickel: early this year the company closed a $20 million deal to sell 19 million Ibs. of finished nickel to Red China. Despite French denials, U.S. Commerce and State Department officers speculate that Charles de Gaulle's government may have urged Le Nickel to make the sale in order to reduce its subsidy.