10 km south of Tamatave
Madagascar

Ownership:
40%    Sheritt International Corporation
27.5% Sumitomo Corporation
27.5% Korean Resources Corporation
5%     SNC-Lavalin

Converters
Dimensions: Diameter = 14.5 m, Height = 24 m

The Ambatovy project is a world-class, large-tonnage, long-life mining venture in Madagascar that is positioned to be the world’s biggest lateritic nickel mine by 2013. Developed under Madagascar’s Large Mining Investment Act, the Ambatovy project is the country’s largest capital project to date. Construction is progressing well, with initial production expected in 2010.

Nickel: 60,000 tonnes
Cobalt: 5,600 tonnes
Ammonium Sulphate: 190,000 tonnes

1. www.sarens.com
2. www.njncc.com    Nanjing Chemical Construction Co., Ltd.
3. Bateman Globe. The Newsletter of Bateman Engineering N.V., No. 74, February 2009
4. Vorster, W. and Hughes, M., "Engineering Challenges Encountered During the Shipping of Two Conveters to Madagascar for the Ambatovy Project", Presented at AIChE Clearwater Convention, 2009.

December 17, 2010 - The total cost for the Ambatovy nickel laterite project in Madagascar is now pegged at $4,76-billion, including a contingency of $50-million, operator Sherritt International said on Friday.  The capital cost estimate for construction of the mine was last increased in 2009 to $4,52-billion, from a previous figure of $3,4-billion.   Sherritt said Ambatovy is still expected to start production by mid-2011.  The Canadian firm owns 40% of the project, Sumitomo and a consortium led by Korea Resources each have a 27,5% stake in the mine, and the project's engineering contractor, SNC-Lavalin, also has a 5% interest.  Sherritt said it will fund its 40% share of the capital cost increase directly. The company has funded a large portion of its share of Ambatovy costs from loans provided by its partners.  “We have thoroughly reviewed every facet of this project and I am confident the required steps have been taken to keep it on track to produce metal by the summer of 2011,” CEO Ian Delaney said in a statement.  “While the variance from our original capital projection is 5%, we felt the steps taken were necessary to ensure that the plant will operate as designed, and that we can ramp up production at a rate which will enable nickel to be delivered to customers as early as possible."  Once in full production, the Ambatovy mine is expected to produce 60 000 t/y of nickel and 5 600 t/y of cobalt.  Sherritt also has nickel, gas, oil and electricity generation assets in Cuba and coal operations in Canada and announced this month it would buy 57,5% of Rio Tinto's Sulawesi nickel project in Indonesia.

Sherritt 2nd Q 2010 report - Ambatovy Project capital expenditures for second-quarter 2010 were $297.3 million (100% basis), 9% ($29.5 million) lower than the prior-year period. Total cumulative project expenditures to June 30, 2010 were US$4.0 billion, excluding financing charges, foreign exchange and working capital requirements, and represent approximately 89% of the projected total project expenditures. The Corporation expects project spending to remain within the US$4.52 billion estimate. During the quarter, demobilization of civil and earthworks personnel began, as facilities at the mine site, port and sulphuric acid plant were completed. During second-quarter 2010, the construction of the power plant, which is being executed under a turn-key contract, was identified as having high potential for delay in completion. Sherritt and the EPCM contractor are now providing assistance to the power plant contractor to ensure scheduled commissioning dates are achieved. During second-quarter 2010, $199.6 million (100%) was provided by the Ambatovy Partners and $69.9 million was drawn on the senior project financing to finance project expenditures. Sherritt financed $51.6 million of its $79.8 million funding obligation through loans from other joint venture partners. Agreements for the additional partner loans were entered into during the global financial crisis in June 2009. With improving economic conditions, Sherritt has agreed in principle to provide at least US$80 million in direct pro-rata shareholder funding prior to further drawdowns on the additional partner loans. Consequently, Sherritt will receive a proportionate share of distributions from the Ambatovy Project. The Project is designed to produce 60,000 tonnes (100% basis) of nickel and 5,600 tonnes (100% basis) of cobalt annually at capacity. Mechanical completion is expected in early 2011.

November 27, 2008 - Sherritt International Corp. and its partners are “initiating steps” to significantly reduce the cost of the $3.2-billion Ambatovy nickel project in Madagascar.  The Toronto-based company — which had indicated last month that it was rethinking all its spending plans — provided no specific cost-reduction targets Tuesday.  But Sherritt, which owns 40 per cent of the project, said it will likely slow down work on the project in order to find savings in light of reduced global demand and metals prices.
“In addition to reducing costs through contract renegotiations of most material contracts, Sherritt will be pursuing reductions through deferrals of capital spending and changes in construction methodology,” the company said.
“Sherritt and its partners also intend to work with the Government of Madagascar to ensure that anticipated changes in construction methodologies maximize the use of Malagasy labour, contractors and other local resources.”
Ambatovy is one of the largest nickel developments in the world.  The company said Sherritt and its partners, Sumitomo Corp. of Japan, Korea Resources Corp. and Montreal-based engineering firm SNC-Lavalin remain committed to completing Ambatovy.
“However, changing market conditions and lower commodity prices in recent weeks have necessitated implementation of strategies to realize the benefit of significant reductions in construction materials, freight costs and labour rates.”