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Debt Overhaul Plan Filed for Sumitomo-Controlled Nickel Mine

By Paul-Alain Hunt

Published: 

Signage for Sumitomo Corp. outside the Otemachi Place East Tower, which houses the company's head office, in Tokyo, Japan, on Tuesday, June 25, 2024. Japanese trading firm Sumitomo sees opportunities in US shale oil and natural gas despite exiting production there three years ago, said Shingo Ueno, who became the company's president in April. Photographer: Kiyoshi Ota/Bloomberg (Kiyoshi Ota/Bloomberg)

(Bloomberg) -- A debt restructuring plan for a nickel and cobalt project in Madagascar majority-owned by Sumitomo Corp. has been filed to a UK court. 

Mine operators Ambatovy Minerals SA and Dynatec Madagascar SA submitted the application to the court, Sumitomo said in a statement on Thursday. The project is 54% owned by the Japanese trading house, who first invested in it in 2005. 

The plan would allow plant equipment malfunctions to be addressed and ensure other improvements, Sumitomo said. The Japanese firm posted an 89 billion yen ($617 million) impairment on the asset earlier this year. 

A glut of low-cost nickel from Indonesia has seen prices of the metal — which is used in electric-vehicle batteries — halve since late 2022, causing many producers to throttle back output. 

The world’s biggest miner, BHP Group Ltd., said in July it will shut its loss-making Nickel West business in Australia until at least early 2027. Anglo American Plc is the process of looking to either sell or close its nickel unit, while Glencore Plc has moved to halt mining operations on New Caledonia.

(Updates with additional details from 2nd paragraph.)

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