Sherritt International Corp is to exit the Ambatovy joint venture in Madagascar, but its decision will not affect nickel or cobalt production at the mine, the Canadian company confirmed to Fastmarkets on Tuesday March 10.
The Canadian miner announced on February 26, 2019 that it would not fund its 12% stake in the Ambatovy JV, with Japan’s Sumitomo Corp and South Korea’s Korea Resources Corp (Kores), to protect Sherritt’s balance sheet after Ambatovy made a cash call to boost its short-term liquidity. Sherritt subsequently announced that it had become a defaulting shareholder on March 6, 2019.
First refusal to fund Sherritt’s 12% share in Ambatovy will now pass to Sumitomo and Kores, while Sherritt itself will lose voting rights and influence on operations at a local level as per the terms of a default under the shareholders agreement.
The Ambatovy mine, which produced 33,733 tonnes of refined nickel and 2,900 tonnes of refined cobalt in 2019, will reportedly continue to produce after Sherritt’s proposed exit, details of which will be firmly announced on April 30.
“Nickel and cobalt production at Ambatovy will not be [affected] by the transaction or pending timelines,” director of investor relations and communications, Joe Racanelli, told Fastmarkets on March 10.