Sumitomo wants to bring Ambatovy Nickel back on stream

JAPAN – Sumitomo has recently publicized that it intends to resume operations in February 2021 at its 54% owned Ambatovy nickel-cobalt operation in Madagascar. The mining and metallurgical facilities were placed on care and maintenance in March due to a national lockdown, imposed by Malagasy Government to control the spread of COVID-19.

According to Roskill, Ambatovy has had a chequered history since starting operations in 2012 and production levels have never consistently exceeded 60% of nameplate capacity.

During construction, the project also experienced massive capital cost overruns with an initial capital cost estimate of US$3.3Bn, which ballooned to US$8.5Bn. Plant redesign and reconfiguration have been one of the fundamental causes of rising capital costs.

Most of the operational issues at the site have been at the processing plant and refinery which has struggled to handle the variability of mined ore grades and mixed mineralogy (this is an issue seen at several HPAL operations around the globe), Roskill said.

Sumitomo has considerable expertise in running mining operations around the globe. When operations resume in February 2021, there will be a new operator on-site following the exit of Sherritt. Sumitomo, however, has not indicated whether it will become the mine’s operator or outsource that to a specialist contractor.

Nickel production is budgeted at 3kt in Q1 2021 and will ramp up over the year. Sumitomo is currently reviewing the mine output plan, which could result in a scaled-back operation producing the nickel intermediate mixed sulphide precipitate (MSP) for sale to the battery market.

Sumitomo Corporation joined the Ambatovy Project in October 2005. Now it is one of the world’s largest nickel projects. It has broadly drawn attention for its unique integrated production system that accomplishes the entire process – from mining to refinery – in a single country.

The actual production is 33,000 metric tons of nickel in 2018 (equivalent to the 2% of market share), while also producing byproducts, including cobalt and ammonium sulphate.

Sumitomo Corporation is ranked in the Fortune Global 500, an annual list complied and published by US Fortune magazine, for 26 years, as one of the global companies leading the world’s development.

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