Sheritt signs with partners definitive agreement to restructure the JV managing Madagascar’s biggest mining project
(Ecofin Agency) - The Canadian firm Sherritt International has, at the end of last week, signed with its partners Sumitomo Holding and Korea Resources, a definitive agreement for the restructuring of the joint venture managing Ambatovy, Madagascar’s biggest mine. After the drop in prices of nickel recorded over the past years, the project has indeed experienced some profitability issues.
Under the terms of the agreement, which are conform with the agreement in principle announced last May, Sheritt will decrease its stake in the nickel and cobalt project, from 40% to 12%. In this framework, it will transfer to its partners, 28% interests in the project and in return, they will clear part of a debt ($1.3 billion) it owes them.
“The signing of a definitive agreement to restructure our Ambatovy joint venture partnership represents a significant milestone,” said David Pathe (picture), CEO of Sheritt.
Sheritt, despite now being a minority stakeholder, will remain the project’s operator and will keep financing it until 2024. Ambatovy eyes an average annual production of 60,000 tons of nickel, 5,600 tons of cobalt and 190,000 tons of ammonium sulfate, over 29 years.