With the ability to produce 4,000 tonnes of cobalt and 40,000 tonnes of nickel each year, the Ambatovy mine significantly contributes to Madagascar’s mining income. Unfortunately, the project has faced difficulties recently that led to a loss in value of around USD 600M.
Sumitomo is gradually resuming production at its Ambatovy nickel and cobalt project in Madagascar. While the immediate focus is stabilizing production, Sumitomo is also considering transferring the mine’s control to another company.
Besides the pipeline incident, Sumitomo failed to meet the mine’s production capacity for the fiscal year ending March 31, 2024. The company produced only 31,000 tonnes of nickel against a target of 40,000 tonnes. Due to various issues, Ambatovy incurred an 89 bn yen (USD 583.72M) write-down at year-end.
It is crucial to recognize that Ambatovy plays a significant role in Madagascar’s export earnings. The project accounted for 25% of the total value of exports in 2022, according to the Central Bank. However, in H1 2024, revenues from nickel exports plummeted by 56.5% due to a 35% reduction in export volume and a 33.1% decline in average prices.
