Madagascar’s Ambatovy nickel project companies are on track to finalize their debt restructuring by early December, according to the project’s majority shareholder, Sumitomo Corporation.
The Japanese trading giant, which holds a 54.2% stake in Ambatovy Minerals and Dynatec Madagascar (the project’s mining and refining arms, respectively), stated it is exploring all options to ensure the project’s sustainability.
The remaining shares in the Ambatovy project are owned by Korea Mine Rehabilitation and Mineral Resources.
Earlier this week, a London court approved the restructuring plan submitted by the project companies, paving the way for financial adjustments.
“As a shareholder, we are committed to evaluating the best policies to safeguard the interests of all stakeholders,” Sumitomo stated.
The Ambatovy project has faced significant headwinds, with nickel prices declining for a second consecutive year due to market oversupply. Sumitomo has also struggled to stabilize production and achieve profitability at the operation.
Production at the nickel and cobalt project had been gradually resuming as of late October following repairs to a pipeline transporting ore from the mine to the processing plant.
Despite these efforts, the project’s financial strain is evident. For the fiscal year ending March 31, Sumitomo wrote down Ambatovy’s book value to zero, resulting in an impairment loss of ¥89 billion ($584 million).
Cumulatively, the project has incurred losses of ¥410 billion, including a ¥265.5 billion impairment loss, as disclosed in August.
While Sumitomo has not disclosed further specifics on the debt restructuring process, it noted that the impact on its financials is under review.
The restructuring marks a critical juncture for Ambatovy as it seeks to stabilize operations and adapt to challenging market conditions.
