Fresh investors eye Madagascar nickel mine after Sumitomo exit

Global investors are taking a closer look at Africa’s critical minerals sector as demand for battery metals continues to rise and supply chains remain tight.

Nickel, used in electric vehicle batteries and stainless steel, has regained attention among commodity traders and mining investors.

That shift in sentiment has placed Madagascar’s Ambatovy nickel project back in focus following a change in its ownership structure involving a group led by experienced mining executives and financiers. 

The renewed interest comes as the global nickel market adjusts to higher prices and uneven supply conditions across major producing regions, including Indonesia.

At the same time, several large-scale mining operations have faced operational disruptions, pushing investors to reassess assets that have struggled but still hold long-term production value. 

Ambatovy stands out in that mix.

The project, one of Africa’s largest nickel and cobalt operations, has long been considered strategically important despite a history of financial strain.

Its latest ownership change highlights how investors are positioning for potential recovery in a sector closely tied to electric vehicle demand and industrial metals consumption.

Ex-Glencore trader joins Consortium behind Ambatovy deal 

A consortium linked to former Glencore nickel trading head Jason Kluk is acquiring Sumitomo Corp’s 54% stake in Ambatovy through Jersey-registered Ambatovy Mineral Resources Investment Holding Co.

Kluk, who left Glencore in late 2024, is listed as a director of Essenwood Partners, the vehicle leading the acquisition alongside South Africa’s Zungu Investments. 

Regulatory filings in the U.K. and Jersey show Kluk also holds majority control in Essenwood Partners.

Sumitomo, which has been involved in the project for more than 20 years, confirmed its exit from the asset as part of the transaction.

Sumitomo exit reflects longstanding financial pressure 

Sumitomo said it will book a $445 million loss on the divestment, adding to cumulative losses of about 400 billion yen ($2.6 billion) tied to Ambatovy over time.

The figures highlight the persistent operational and cost challenges that have weighed on the project despite its scale and resource base. 

The Japanese trading house’s decision marks a full withdrawal from one of its long-standing mining investments, underscoring the difficulty of maintaining profitability in large, complex nickel operations in Madagascar.

Market conditions support renewed interest in Nickel assets 

Nickel prices have climbed to multi-year highs in recent months, supported by tighter expected supply and shifting output policies in key producing countries such as Indonesia.

Additional pressure from industrial input constraints, including sulphur availability, has also affected production economics across the sector. 

Ambatovy itself was temporarily shut after cyclone damage earlier this year but is expected to resume production between May and June, according to Sumitomo.

The mine produced about 28,000 metric tons of nickel and 2,500 tons of cobalt in 2024, keeping it among the larger suppliers in Africa’s critical minerals landscape.