Madagascar’s Ambatovy Nickel Project Set for Debt Restructuring Completion in December

Madagascar's Ambatovy nickel project companies are expected to complete their debt restructuring in early December, according to a statement by Sumitomo Corp, the project's major shareholder. Sumitomo, which holds a 54.2% stake in the Ambatovy companies—Ambatovy Minerals and Dynatec Madagascar—said it is still assessing all options for the project's future.

The remaining stake in the project is held by Korea Mine Rehabilitation and Mineral Resources. The debt restructuring plan, filed by the project companies, was approved earlier this week by a London court, marking a significant step towards stabilizing the project. Sumitomo emphasized that it will continue to evaluate the best path forward for all stakeholders involved.

Nickel prices are heading for a second consecutive year of decline due to an oversupplied market, and the Ambatovy project has faced ongoing struggles related to stabilizing production and improving profitability. As of late October, the nickel and cobalt project had slowly resumed production following a halt caused by damage to a pipeline that supplies ore from the mine to a processing plant.

Sumitomo did not provide further specifics regarding the debt restructuring but noted that it is reviewing the financial impact on its overall results. The Japanese trading company previously wrote down Ambatovy’s book value to zero for the fiscal year ending March 31, incurring an impairment loss of 89 billion yen ($584 million). The project has accumulated a total loss of 410 billion yen, including impairment losses of 265.5 billion yen, as reported by a spokesperson in August.