Sherritt to Take C$1.6-billion Loss on Ambatovy Nickel Mine

Reuters reported that Sherritt International Corp. (TSX:S) and Sumitomo Corp. (TSE:8053) are looking to take significant hits on their Madagascar-based Ambatovy nickel mine. The operation has been negatively impacted by low nickel prices.
As quoted in the market news:

The companies had been ramping up production at the 60,000 tonne a year nickel mine, but the prolonged slump in commodities is taking an ever greater toll on miners and traders, forcing losses, asset sales and writedowns, with no end in sight as the new year starts.

Sumitomo said it would take a writedown of 77 billion yen ($652-million) and withdrew its earnings forecast for the year through March 2016. It blamed the price declines in nickel for the writeoff on the Ambatovy mine, in which it has a 32.5 per cent stake.

“There is a possibility that we may post impairment losses in additional projects,” Sumitomo said in a release.

Sherritt said it was recording an impairment expense of about $1.6-billion (Canadian) based on its 40 per cent share of Ambatovy. The Toronto-based company said total losses at the mine amounted to about $2.4-billion.

Click here to read the full Reuters report.