16 January 2013 Last updated at 11:32 ET

New Caledonia profile

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A French overseas territory in the Pacific, New Caledonia has seen deep divisions between its indigenous and European populations, notably over the thorny question of independence.

Named by the British explorer Captain James Cook, who spotted similarities with the Scottish highlands, the territory was annexed by France in 1853 and became a destination for thousands of French convicts.

But as the European population burgeoned, tensions - often over the loss of land - rose between the incomers and the indigenous Melanesians, known as Kanaks. A Kanak revolt in 1878 claimed more than 1,000 lives and heralded further repression by the French rulers.

Cultural Center Tjibaou in Noumea, capital of New Caledonia

Kanaks represent about 45% of the population. Europeans, most of them born in the territory, account for about a third of the inhabitants.

Rising pro-independence sentiment among the Kanaks, and strong resistance to the idea among the non-indigenous population, set the scene for violent unrest in the mid-1980s. At one stage France declared a state of emergency and sent paratroopers.

The signing of the 1988 Matignon Accord marked a reconciliation between the Kanak and European communities. It proposed an end to direct rule from Paris and a vote on independence, to be held in 1998. It also set out to tackle the economic imbalance between the wealthier - and mainly European - southern province and the rest of the territory.

However, the planned referendum was postponed under the 1998 Noumea Accord, which gave New Caledonia greater autonomy and stipulated that the independence vote should be held between 2014 and 2019. The accord also created New Caledonian citizenship.

Nickel is processed at this plant in Noumea

In 2006 the French parliament approved plans to restrict the voting rights of French citizens in the territory, meaning that only long-standing residents would be able to vote in territorial elections. The legislation had long been sought by the Kanak community.

In 2010, the New Caledonian Congress voted to adopt a second flag, the Kanak flag, to be flown alongside the French tricolor. However, there continued to be opposition to the move, and the decision to adopt a second official flag was one of the issues that led to the collapse of the coalition government in 2011.

The archipelago, which lies around 2,000 km from Sydney, Australia, possesses around a quarter of the world's nickel deposits. The industry boomed in the 1960s but is a hostage to price fluctuations. Nevertheless, New Caledonia enjoys one of the region's highest average incomes per capita.

The main island, Grande Terre, is ringed by a coral reef. Mountains divide the verdant east from a drier west. The territory boasts abundant plant and animal life. Colonial buildings and fine beaches contrast with the infrastructure of the nickel industry.