Madagascar’s Ambatovy nickel project companies filed a debt restructuring plan with an English court in London on Wednesday, a spokesperson at the project’s major shareholder Sumitomo Corp said.
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.
The filing is part of their effort to ensure the stable and efficient operation of the project, not a liquidation process, the spokesperson told Reuters.
The spokesperson did not provide details of the debt restructuring plan and future plans for the project, saying “we are still considering all options.”
The Japanese trading house has been struggling to stabilise production and improve profitability at the Ambatovy project, which launched in 2005.
In May, Sumitomo CEO Shingo Ueno said that the company will consider all possible options to decide the best future policy of the Ambatovy project for all stakeholders.
Asked whether a withdrawal was among the options, Ueno said at the time that Sumitomo’s immediate priority is to bring back nickel production to normal levels by fixing glitches at the plant.
The project produced about 8,000 metric tons of nickel during the April-June quarter, down from about 10,000 tons a year earlier, Sumitomo said in July. It expects an annual production of around 35,000 tons for the year to March 31.
Sumitomo booked an impairment loss of 89 billion yen ($616 million) on the project for the financial year ended March 31, reducing the project’s book value to zero.
The Japanese company is still assessing the impact of Ambatovy’s latest debt restructuring plan on its earnings, the spokesperson said.
($1 = 144.4100 yen)
(By Yuka Obayashi; Editing by Philippa Fletcher)
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