Sumitomo Corp Resumes Production at Ambatovy Nickel and Cobalt Project

TOKYO (Reuters) – Japanese trading house Sumitomo Corp announced on Thursday the resumption of production at the Ambatovy nickel and cobalt project in Madagascar at the end of October, following a pipeline issue a month earlier. However, the company is reviewing future output volumes.

Sumitomo has been facing challenges in stabilizing production and improving profitability since the project's launch in 2005. The Ambatovy project produced approximately 10,000 metric tons of nickel from April to September, which is only half of the volume produced during the same period last year. The company did not provide a full-year output forecast, stating it is currently under review. Initially, Sumitomo expected annual nickel production at Ambatovy to be 35,000 tons for the year ending March 31.

Sumitomo holds a 54.2% stake in the project companies—Ambatovy Minerals, a mining company, and Dynatec Madagascar, a refining company—while Korea Mine Rehabilitation and Mineral Resources owns the remaining stake.

In their financial results presentation, Sumitomo stated, "As a shareholder of this project, we will keep considering all options to identify the best policy going forward for all related stakeholders."

The company reported a net profit of 254 billion yen ($1.7 billion) for the six-month period ending in September, which marks an 11% decline from the same period last year, partly due to weak coal prices. In the previous year, Sumitomo's net profit for the April to September period was 285 billion yen. The company maintained its net profit forecast for the fiscal year ending March 2025 at 530 billion yen.

($1 = 152.8900 yen)