Sumitomo Corp. to exit Madagascar nickel project in $418 million stake sale

Sumitomo Corporation, a leading Japanese integrated trading company, is accelerating its exit from Madagascar’s Ambatovy nickel operation through a $418 million stake sale, marking a decisive retreat from one of its most capital-intensive mining investments. 

The Japanese trading house has arranged financing for the buyers acquiring its 54% stake, ensuring transaction closure by end-September, according to a recent report. The deal underscores a broader recalibration in global battery metals exposure as volatility, operational disruptions, and sustained losses weigh on legacy mining assets.

Ambatovy ownership reshapes

The 54% stake is being acquired by Jason Kluk, former head of nickel trading at Glencore, alongside South Africa’s Zungu Investments. Korea Mine Rehabilitation and Mineral Resources Corporation retains its 46% position, preserving state-linked participation in the asset.

Sumitomo confirmed the transaction reflects a “comprehensive economic assessment,” adding that the exit supports “continued and sustainable operations under new ownership.”

$3 billion investment, heavy losses

Over two decades, Sumitomo has invested roughly $3 billion into Ambatovy but has recorded cumulative losses of about $2.5 billion, making it one of its most challenging overseas mining ventures.

The company will also absorb a $418 million impairment tied to the sale, reflecting asset devaluation and restructuring costs. Part of the proceeds is expected to fund repairs to cyclone-damaged infrastructure. Production has been suspended since February and is projected to restart by end-June.

A strategic battery metals asset

Ambatovy remains one of the world’s largest lateritic nickel and cobalt operations, anchored by an estimated $8 billion development footprint. The integrated system includes a mine near Moramanga, a 220-kilometer slurry pipeline, and a hydrometallurgical plant near Toamasina port.

With a capacity of roughly 60,000 tonnes of Class I nickel and 5,600 tonnes of cobalt annually, the asset plays a critical role in global electric vehicle and energy storage supply chains.

Sumitomo’s global repositioning

Sumitomo Corporation, a Tokyo-based sogo shosha, operates in more than 60 countries with a diversified portfolio spanning metals, energy, infrastructure, real estate, and consumer sectors.

Founded in 1919 and expanded globally after 1945, it remains a core pillar of the Sumitomo Group while operating independently of affiliated financial institutions such as Sumitomo Mitsui Banking Corporation.