The Ambatovy nickel and cobalt mine in Madagascar, a key contributor to the country’s export earnings, is navigating significant challenges. As Sumitomo Corporation works to revive operations, discussions of transferring ownership loom on the horizon.

With an annual production capacity of 40,000 tonnes of nickel and 4,000 tonnes of cobalt, Madagascar’s Ambatovy mine is vital to the nation’s mining sector. However, operational setbacks have caused a value loss of nearly US$ 600 million.

Sumitomo Corporation is gradually ramping up production at Ambatovy after falling short of its 40,000-tonne nickel target for the fiscal year ending March 2024, achieving just 31,000 tonnes, as per  a report on Stainless World. Compounding the challenges, the project faced a write-down of 89 billion yen (approximately US$ 583.72 million) by year-end.

In 2022, Ambatovy contributed 25 per cent of Madagascar’s total export value, according to the Central Bank. However, in H1 2024, revenues from nickel exports plunged by 56.5 per cent, driven by a 35 per cent drop in export volumes and a 33.1 per cent decline in average market prices. Amid these struggles, Sumitomo is weighing a potential transfer of control of the mine to a new operator.

In a previous press release issued by company, it was stated that: “Sumitomo Corporation hereby announces that the English court has sanctioned the Restructuring Plan (“RP”) for the Ambatovy Nickel Project in Madagascar on November 26, 2024, which had been filed by the Project Companies (*1) on August 28, 2024. With cooperation from all creditors, the procedure for debt restructuring is expected to be completed in early December 2024.”

The image is an AI-generated picture of a mining site, used for representational purpose.