Sumitomo Corp. to Start Madagascar Nickel JV

Sumitomo Corporation announced on Thursday the firm starts joint development of nickel in Madagascar with Sherritt International Corporation and Korea Resources Corporation. They build integrated production facilities from mining to refinery with output capacity of annual 60,000 tonnes for nickel and 5,600 tonnes for cobalt for around US$ 3.3 billion starting operation in second half of 2010. They finance US$ 2.1 through project finance from Japan Bank of International Cooperation and other institution. Sherritt has 40% of the Ambatovy Nickel Project with 27.5% share by Sumitomo, 27.5% by Korea Resources and 5% by SNL-Lavalin Inc. The one of the world largest nickel development is the first joint project by Japan, Canada and Korea. The operation reaches full capacity in early 2013. The nickel output represents a fourth of Japanese consumption and the cobalt represents around 40% of Japanese demand. The project also produces annual 190,000 tonnes of ammonium sulfate as byproduct. The mining operation is expected to keep 27 years.Sumitomo and Korea Resources purchase maximum 30,000 tonnes of nickel each. Sumitomo supplies the metal to Nippon Steel & Sumikin Stainless Steel, Sumitomo Metal Industries and other steel makers and battery makers.