Pipeline Damage Halts Nickel, Cobalt Output at Madagascar’s Ambatovy
Nickel and cobalt production at Madagascar's Ambatovy mine has been interrupted after a pipeline transporting ore from the mine in the east of the country to its refinery was damaged, according to a statement from Sumitomo Corp, a major shareholder. The incident, which occurred on September 25, is under investigation, though no injuries have been reported.
Ambatovy is currently evaluating the extent of the disruption and how long it will take to resume normal operations. Market traders have warned that if the stoppage lasts more than two months, it could lead to tighter cobalt supplies.
Ambatovy, which has faced ongoing challenges in stabilizing production and improving profitability since its launch in 2005, produced around 8,000 metric tons of nickel during the second quarter of this year, a decrease from 10,000 tons during the same period last year. The company expects to reach an annual output of 35,000 tons of nickel by the end of March 2024, though it has not disclosed its cobalt production for this year. In 2023, the mine produced 3,390 tons of cobalt, according to Darton Commodities.
Sumitomo owns a 54.2% share of the project, while the remaining stake is held by Korea Mine Rehabilitation and Mineral Resources. Ambatovy’s operators filed a debt restructuring plan in London in August, aiming to secure stable operations. Sumitomo emphasized that this was a step toward stabilizing the project, rather than a move toward liquidation.
