NAIROBI, May 1 – Japanese trading firm Sumitomo Corporation plans to sell its majority stake in the Ambatovy nickel project in Madagascar following a review of market conditions and ongoing operational challenges, Bloomberg News reported on Friday.
The company said it will divest its 54% interest in Ambatovy, one of the world’s largest nickel mining and refining operations, during the current fiscal year ending March 2027.
The decision comes after a series of disruptions at the site, including damage caused by Cyclone Gezani, which struck eastern Madagascar in February and forced a suspension of operations. The company has yet to restart production since the storm, according to a spokesperson.
Ambatovy had already faced technical setbacks prior to the cyclone, including issues with its slurry pipeline and processing systems, which have weighed on output.
Sumitomo expects to record a charge of about ¥70 billion, (equivalent to $445 million), related to the divestment. The financial impact will be partially offset by lower income tax expenses, the company said.
The move follows earlier indications from President Shingo Ueno, who said in 2024 that the company would consider strategic options for the asset after attempting operational improvements.
The Ambatovy project has long been a key source of nickel and cobalt, materials critical to battery production, but persistent operational difficulties and external shocks have complicated its performance and future outlook.
