Sumitomo, Japanese trading house and majority owner of Madagascar’s Ambatovy nickel and cobalt operation, kept its full-year production forecast in the “mid-30,000-ton” range after reporting about 7,000 tonnes of nickel in the first quarter of the current fiscal year—down from roughly 8,000 tonnes a year earlier—as operations recovered from a precautionary pipeline inspection. The company said ramp-up began in April with stability reached in early May, and it plans a site-wide maintenance shutdown in October–November.
Operations stabilise after slurry-pipeline incident
Ambatovy suspended production in February to inspect a long slurry pipeline that was damaged in late September 2024. No injuries were reported and the investigation focused on a section of the ore pipeline linking the inland mine to the coastal processing hub near Toamasina. Output resumed gradually from April, returning to steady state in early May, according to Sumitomo’s quarterly briefing. The pipeline spans roughly 200 km, a critical link in Ambatovy’s mine-to-refinery logistics.
Guidance and planned maintenance
Despite the soft first quarter, Sumitomo held guidance for the year at the “mid-30kt” level and flagged a full plant shutdown for maintenance from October to November—part of efforts to improve reliability at an operation that has struggled to deliver consistent volumes. Ambatovy’s installed design targets about 40,000 tonnes per year of refined nickel when running normally, providing headroom for recovery if the balance of the year proceeds without disruption.
Ownership, financial reset and strategic review
Sumitomo holds a 54.17% interest in Ambatovy Minerals (mining) and Dynatec Madagascar (refining), with the remainder owned by Korea Mine Rehabilitation and Mineral Resources (KOMIR). The project completed a court-sanctioned debt restructuring in late 2024 that eliminated lender debt at the project companies. Management has said it continues to “examine all options” for Ambatovy as it works to stabilise operations and improve returns.
Industry context and pricing
Nickel prices remain subdued versus recent years as Indonesian supply weighs on sentiment: LME three-month nickel was near $15,000 per tonne on July 31. In this price environment, operational reliability—particularly for laterite projects with complex hydrometallurgical flowsheets and long logistics chains—can be as important as headline capacity in determining cash generation. Ambatovy’s ability to meet guidance after the October–November shutdown will be closely watched by stainless-steel and battery-sector buyers tracking non-Indonesian supply.
Company Background and Market Context
Ambatovy is a large lateritic nickel-cobalt operation that mines ore inland and transports slurry to a coastal pressure-acid-leach processing complex. Since commissioning, the project has faced periodic reliability issues and market-driven curtailments, but remains one of the few sizable sources of refined Class-1 nickel outside Indonesia and Russia. Sumitomo’s reaffirmed guidance suggests an improving operational baseline post-inspection, though the planned fourth-quarter shutdown will temper near-term output.
Nickel is used mainly in stainless steel and increasingly in certain battery chemistries. Prices around $15,000/t keep marginal producers cautious, while diversified supply outside Indonesia is strategically valued by buyers seeking geographic diversity. Sustained, predictable output from assets such as Ambatovy can help balance a market dominated by rapid growth in Indonesian supply.
