By Katya Golubkova and Yuka Obayashi
TOKYO (Reuters) -Japanese buying and selling home Sumitomo Corp mentioned on Thursday it was slowly resuming manufacturing on the Ambatovy nickel and cobalt undertaking in Madagascar after final month’s pipeline challenge and is reviewing future output volumes.
Sumitomo has been struggling to stabilise manufacturing and enhance profitability on the Ambatovy undertaking, which launched in 2005.
“Our precedence for the Ambatovy is to normalize manufacturing by addressing operational points,” Chief Government Shingo Ueno instructed a information convention.
“After that, we’ll take into account all choices to find out the most effective course, as we have acknowledged earlier than,” he added, noting that choices embrace retaining the undertaking or promoting a stake to a different firm and allow them to be the operator.
The undertaking produced about 10,000 metric tons of nickel in April-September, or a half of the quantity in the identical interval a yr in the past, the corporate mentioned, with out offering an annual output forecast.
It had earlier anticipated annual nickel manufacturing at Ambatovy of 35,000 tons for the yr to subsequent March.
Sumitomo owns a 54.2% stake within the undertaking corporations – Ambatovy Minerals, a mining firm, and Dynatec Madagascar, a refining firm – with the remaining stake held by Korea Mine Rehabilitation and Mineral Assets.
For the yr that ended March 31, Sumitomo wrote down Ambatovy’s ebook worth to zero, incurring an impairment lack of 89 billion yen ($583.72 million).
Requested about potential additional losses on the undertaking, Ueno mentioned further funding could also be essential to maintain operations, which might result in an impairment if deemed unrecoverable.
Sumitomo posted a web revenue of 254 billion yen for the six months to September, down 11% from a yr earlier, partially hit by weak coal costs.
The corporate maintained its web revenue forecast for the fiscal yr to March 2025 unchanged at 530 billion yen.
($1 = 152.4700 yen)
