Sumitomo Corp Resumes Madagascar's Ambatovy Nickel and Cobalt Project Despite Operational Hurdles

[Sumitomo Corp Resumes Ambatovy Nickel and Cobalt Project Amidst Operational Challenges]

Japanese trading giant Sumitomo Corp has gradually resumed production at the Ambatovy nickel and cobalt project in Madagascar following a pipeline issue last month. Despite ongoing efforts to stabilize operations and boost profitability at the venture launched in 2005, production has met significant hurdles. Sumitomo reported only about 10,000 metric tons of nickel production from April to September—half of last year's output for the same period. Originally, 35,000 tons were anticipated for this fiscal year. CEO Shingo Ueno emphasized resolving operational issues as a top priority before considering future prospects, including potential asset sale options. The Ambatovy project, valued zero due to a recent 89 billion yen impairment loss, remains 54.2% Sumitomo-owned, with the rest held by Korea Mine Rehabilitation and Mineral Resources. Ueno hinted additional funding might be needed to sustain operations, possibly incurring further financial write-downs. While the company's net profit for the six months to September dropped 11% year-over-year to 254 billion yen, it upheld its 530 billion yen annual profit forecast.