SHANGHAI, Mar 30 (SMM) – Japan's diversified mining company Sumitomo announced on March 26 to temporarily suspend operations at its Ambatovy nickel project in Madagascar as well as its silver, zinc and lead mining project in Bolivia to prevent the spread of the COVID-19 virus.
In Madagascar and Bolivia, all-day or night curfews have been imposed and public transportation has been suspended.
SMM learned that Sumitomo owns a 47.7% stake in the Ambatovy project, which is designed with an annualised capacity of 60,000 mt with nickel briquette as the main product. In 2019, the project produced 33,700 mt of nickel and over 3,000 mt of refined cobalt as a by-product.
The temporary suspension of the Ambatovy project may only limitedly impact the near-term supply of nickel briquette supply in China. Nonetheless, it will increase China’s dependence on nickel briquette from other sources of imports such as Australia and South Africa, given current low inventories of such materials in China.
Nickel briquette from Madagascar and Australia has tariff-free access to the Chinese market. Customs data showed that, in the first two months of 2020, China imported some 188 mt of nickel briquette from Madagascar, while took 1,191 mt of nickel briquette from Australia. This compared with the imports of 5,020 mt of nickel briquette from Madagascar in the full year of 2019.
According to SMM data, inventories of nickel briquette in the Shanghai bonded areas declined 200 mt in the week ended March 27 to 2,000 mt.