Mineral Resources, Energy, Chemical & Electronics - Business overview
Antananarivo, the capital of Madagascar
Nickel is best known as a component of stainless steel. These days, however, widespread use of nickel in batteries and electronics is leading to increasing interest in the resource as a rare metal. In particular, demand for nickel for mobile phone components has surged in recent years. Meanwhile, opportunities to enter the market are extremely limited due to uneven global deposits and the oligopoly that characterizes the nickel industry.
Seeking to break into this hard-to-crack market, the Sumitomo Corporation Group is involved in one of the world's largest nickel extraction projects, the Ambatovy Project. Based in Madagascar, this initiative is developing a new nickel mine with vast reserves to help meet growing demands for the mineral resource in coming years.
Refinery plant currently under construction
Sumitomo Corporation joined the Ambatovy Project in October 2005. The goal was to develop a large-scale, world-class nickel mine and establish an integrated production system encompassing all stages from mining to refinery in a single country. It was agreed that this exceptionally large integrated production project would be managed and operated in partnership by four corporations from three countries: two Canadian companies, one specializing in mining and the other in engineering, a South Korean state-owned resource development corporation, and Sumitomo Corporation. The unprecedented scale of this international joint venture for nickel development is one aspect of the project that has generated a host of headlines. Another significant feature is the fact that this is the first ever resource development project in which Japan and South Korea, two of the world's biggest nickel consumers, have entered into partnership.
The Ambatovy Project has an annual design capacity of 60,000 metric tons of nickel (projected to be 4% of total global production in 2011) and 5,600 metric tons of cobalt (projected at 9%). An integrated production system for all stages from mining to refinery is being developed for operation of the project.
Children at a primary school built in an immigrant village under the support program. Education is provided for free to pupils aged 13 or younger.
There were always concerns that political instability and other social uncertainties within the region might affect the Ambatovy Project. That risk surfaced in March 2009 in the form of a national political crisis, when an unelected regime took over rule of the country in a coup d'etat. Although that political change cast short-lived doubt over the fate of the project, which had been proceeding smoothly up to that point, in the end nothing actually happened to disturb the project site and construction work continued as planned.
Smooth and stable progress, as was maintained during the 2009 political unrest, is achieved in part by concerted efforts the project partners have made to build understanding among the Malagasy government and local residents of the project's importance for the future of Madagascar. Thanks to these efforts, which mainly took the form of meetings, the importance of the project has been accepted and shared among the country's people. Anticipation of economic benefits from the export of mine products—due to start in the near future—also works favorably to gain public support for the project.
