SYDNEY:The coalition government in New Caledonia, a French territory in the Pacific, has collapsed after pro-independence politicians resigned, citing persistent economic issues and unrest over the sale of nickel assets, local media reported on Wednesday.

The South Pacific archipelago, 1,200 km (750 miles) east of Australia, has been gripped by riots over the sale process of Brazilian mining giant Vale's local nickel business, with protesters saying a locally led offer had been unfairly overlooked.

New Caledonia, with a population of about 290,000, is also grappling with the question of decolonisation after twice rejecting independence votes in 2018 and 2020. A third independence referendum to separate from France is due by the end of next year.

Five pro-independence politicians in the 11-member executive have resigned, local media reported. Congress must elect a new government within 15 days.

New Caledonia is the world's fourth-largest nickel producer, behind Indonesia, the Philippines and Russia. Demand for nickel, mainly used in making stainless steel, is expected to grow rapidly as a raw material in electric vehicle batteries.

Vale wants to sell its nickel business in New Caledonia to a consortium of buyers including Swiss commodities trader Trafigura. Indigenous Kanak leaders had supported an earlier bid designed to keep majority ownership under the control of the island territory.

A letter from the resigning government members referred to the sale process, budget issues and a lack of consultation over the next independence vote for their decision to leave the coalition.