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The semitropical archipelago of New Caledonia lies 930 miles (1,500 kilometers) east of Australia and 11,160 miles (18,000 kilometers) from Metropolitan France, of which it is an overseas possession. Just off the northeast coast of the main island, Grande Terre, lie the Loyalty Islands, raised coral atolls. Grande Terre is 248 miles (400 kilometers) long by 31 miles (50 kilometers) wide and is a piece of Gondwanaland that broke away from Australia 60–80 million years ago. This island contains great mineral wealth, including about 25 percent of the world's nickel reserves, and is the third-largest producer of nickel, which represents over 90 percent of its export revenues.

The rare plants that have managed to adapt to the soil's high mineral content are unique to New Caledonia. The archipelago therefore exhibits extremely high levels of floral and faunal (terrestrial and marine) endemism. There are 3,200 plant species, of which 79 percent are found only there, while the islands and surrounding lagoon are home to many species of bats, birds, and lizards, as well as the dugong and five species of sea turtle. New Caledonia is considered a conservation priority by the World Wildlife Fund (WWF), Conservation International, and the World Conservation Union (IUCN), for both its coral reef (the world's second largest) and its unique dry forests. Few fragments of the original habitat remain, however, due to uncontrolled fires; nonnative cattle, pigs, and deer; urban and industrial activities; and, of course, mining, which began in 1874 and intensified greatly in the 1950s. The environmental impacts of strip-mining, which include soil erosion, sedimentation of rivers and beaches, and coral reef damage, were virtually unregulated until the 1970s. Although mineral extraction is less damaging today, abandoned mines continue to undergo serious erosion and leaching into watercourses. Meanwhile, the archipelago's sole nickel refinery is its main source of atmospheric pollution, and two more are planned.

Melanesians reached New Caledonia around 3,000 years ago (as marked by the Lapita pottery site), and a complex system of exchange relations and chieftaincies emerged, supported by traditional yam farming and fishing. Captain James Cook and his crew landed on Grande Terre in 1774 and named the archipelago. However, France took possession in 1853, and over the next century the original inhabitants, the Kanak, saw their most fertile lands seized while they themselves were forced onto reserves, to the detriment of their culture and languages.

Today, Melanesians make up the main ethnic group, at 45 percent of the total population, estimated at only 231,000 in 2004. Another 34 percent of New Caledonia's inhabitants are people of European origin, many being the descendants of former French prisoners banished to Grande Terre in the late 19th century. Other minority ethnic groups originate from the Pacific and Asia. Due almost entirely to financial transfers from Metropolitan France, New Caledonia's high Gross Domestic Product (GDP) places it among the 20 wealthiest nations in the world. However, this wealth has traditionally been concentrated in the capital, Nouméa (home to over 60 percent of the population) and is skewed toward those of European descent. French is the lingua franca, although over 20 Kanak languages are still recognized.

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