Japan’s Sumitomo to divest stake in Madagascar nickel project
Sumitomo Corp plans to sell its majority stake in the Ambatovy nickel project in Madagascar following a review of market conditions.
The Japanese trading house said it will divest its 54% interest in Ambatovy, one of the world’s largest nickel mining and refining enterprises, during the first half of the current fiscal year to March 2027. The operation has suffered a string of production issues, most recently a devastating cyclone in February.
Sumitomo expects to book a charge of around ¥70-billion ($445-million) on the transaction, it said in a statement Friday, but this will be offset partly by a reduction in income-tax expenses.
Operations at Ambatovy were suspended shortly before Cyclone Gezani struck eastern Madagascar on February 10. Since then, Sumitomo has been unable to restart the project, a company spokesperson said last week.
Prior to that, the project suffered damage to a slurry pipeline among other processing issues. Sumitomo president Shingo Ueno told Bloomberg News in an interview in 2024 that the company planned to work on improvements at the facility, after which it would consider options including a divestment.
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