Sumitomo Corp to Develop Nickel Resource in Madagascar

Sumitomo Corporation announced on Monday the firm concluded shareholders agreement with Korea Resources Corporation (KORES) and SNC Lavalin Inc. on Ambatovy Nickel Project in Madagascar, which had been controlled by Sumitomo Corp and Dynatec Corporation of Canada so far to establish integrated nickel production system from ore to ingot. Sumitomo Corp will have 27.5% interest in Ambatovy Nickel Project with 40% shareholding by Dynatec, 27.5% by KORES and 5% by SNC.This is the first nickel resource developing project participated by Japan, Canada and South Korea. Investment will account for US$ 2.5 billion for the early development phase. Total production system will be established in Madagascar including mines, smelting and refining equipment. The plant will start operation at the beginning of 2010 with 60,000 tonnes of annual output capacity for nickel ingot, 5,600 tonnes for cobalt ingot and 190,000 tonnes for ammonium sulfate. Sumitomo Corp estimates lifetime of the mine to be 27 years with highest cost competitiveness in the world.The shareholders will acquire environmental approval for the project within 2006, prepare project finance during January-March 2007 and start construction in mid 2007. Dynatec and SNC will apply technology and operating know-how for the project, while Sumitomo Corp and KORES will contribute in finance preparation and product sales.