Madagascar's Ambatovy nickel project to complete debt restructuring in December, says Sumitomo
Madagascar's Ambatovy nickel project companies expect to complete its debt restructuring in early December, the project's major shareholder Sumitomo Corp 8053.T said on Thursday, adding that it was still considering all options for Ambatovy.
Sumitomo owns a 54.2% stake in the project companies - Ambatovy Minerals, a mining company, and Dynatec Madagascar, a refining company - while the remaining stake is held by Korea Mine Rehabilitation and Mineral Resources.
Earlier this week, a London court approved the restructuring plan filed by the project companies, Sumitomo said in a statement.
"As a shareholder for this project, we will continue to assess all options in identifying the best policy moving forward for all related stakeholders," Sumitomo said.
Nickel prices CMNI3 are heading for the second year of decline due to an oversupplied market, while the Japanese trading house has been struggling to stabilise production and improve profitability at the Ambatovy project.
As of late October, the nickel and cobalt project was slowly resuming production, which had been halted because of damage to a pipeline supplying ore from its mine to a processing plant.
Sumitomo did not provide any further details about the debt restructuring but said that it was reviewing its impact on Sumitomo' financials.
For the year that ended March 31, Sumitomo wrote down Ambatovy's book value to zero, incurring an impairment loss of 89-billion yen ($584-million).
The Ambatovy project has resulted in an accumulated loss of 410-billion yen for Sumitomo, including a total impairment loss of 265.5-billion yen, its spokesperson told Reuters in August.
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