Ambatovy

Overview

Ambatovy is a large-tonnage, long-life nickel and cobalt mining enterprise located in Madagascar. Total project costs are more than US$ 7 billion1, making Ambatovy the largest-ever foreign investment in the country – and one of the biggest in sub-Saharan Africa and the Indian Ocean region. Once it reaches full commercial production, it will have the annual capacity to produce 60,000 tonnes of refined nickel, 5,600 tonnes of cobalt, and 210,000 tonnes of ammonium sulphate fertilizer. Ambatovy is positioned to be among the world’s largest lateritic nickel mines.

Ambatovy aims to be a leader in operational efficiency, health and safety, environmental management, and social engagement – while contributing to the long-term prosperity of Madagascar.

Key Facts

Project lifespan: minimum 29 years

Current status: operation phase ramp-up

Major components:

Mine site located near Moramanga
220 km Pipeline to transport slurried ore to the Plant site near Toamasina for processing
Plant site that produces high-grade nickel and cobalt briquettes
Construction/expansion of supporting infrastructure, including port facilities, new roads, railway lines, a tailings dam and power plant

Current Employment: approximately 9,000 (3,000 employees, 6,000 operations contractors); 84% Malagasy

Ambatovy's partners:

Sherritt International Corporation (40%)
SNC-Lavalin Incorporated (5%)
Sumitomo Corporation (27.5%)
Korea Resources Corporation (27.5%)

Ambatovy already contributes significantly to Madagascar’s gross domestic product and will provide important revenue to the country for years to come. Madagascar’s nickel is now poised to become its primary export over more traditional products as a result of Ambatovy’s operations. As Ambatovy refines its end products on the island, it generates additional local benefits, such as technology transfer, quality employment, and many economic returns. Ambatovy is committed to adding value within Madagascar to ensure that the Malagasy people reap the rewards of their resources and labour.

Production and Operations

Ambatovy is now in its Operations phase ramp-up. Once fully operational, Ambatovy will produce 60,000 tonnes of refined nickel, 5,600 tonnes of refined cobalt, and 210,000 tonnes of ammonium sulphate fertilizer annually for at least 29 years. This will place nickel among Madagascar’s most important exports.
Operations begin at the Mine Site, where lateritic ore is extracted in slurry form and then transported by Pipeline to the Plant Site on Madagascar’s east coast, where it will undergo processing and complete refining. My tab contents

History

1911
Nickel first identified in Madagascar by the Syndicat Minier de Madagascar.
1960
Existence of a nickel deposit at Ambatovy and Analamay (see map) discovered by the Malagasy Geological Service.
1961-62
The Syndicat Moramanga – 85% Bureau de Recherches Géologiques et Minières (BRGM) and 15% the UGINE company – determines the site has up to 80 million tonnes of 1.2 – 1.3% nickel.
Prospection continues throughout the 1960s.
1969
A new syndicate consisting of UGINE Kuhlmann, Pechiney, SLN, ACC, COFIMER, Omnimines, and BRGM undertakes further evaluation studies.
1970
Additional studies carried out by the Groupement d’Etude de Nickel de Moramanga – GENIM, a consortium of UGINE Kuhlmann (31%), Société Le Nickel (31%), Anglo-American (21%), BRGM (9%), COFIMER (4%), and Omnimines (4%).
Mine reserves estimated at this point to be 40 million tonnes.
1970s
GENIM’s permit expires.
1979
North Korean operation mines 2,000 tonnes of ore, which is exported to North Korea.
1994
Creation of Phelps Dodge Madagascar, SARL (PDM).
PDM begins initial feasibility study and environmental and social impact assessment, which are finalized in 1997.
1995
PDM acquires the rights to the Ambatovy deposits and four exploration permits. Exploratory work begins.
1997
Exploratory work by PDM ends. Work included:
Seven pits dug: four at Ambatovy and three at Analamay. Pits dug by hand, some to a depth of 30 meters, with a diameter of two meters.
400 holes drilled, yielding 18,000 meters of core samples.
Mine reserves estimated to be 83 million tonnes.
1998
Project put on hold by PDM.
1999
New mining code promulgated by the Government of Madagascar, covering all aspects of mining.
2002
Large Mining Investment Act – Loi sur les Grands Investissements Miniers (LGIM) – comes into force providing legal stability and investment incentives.
2003
Multiple Ambatovy exploration permits condensed into a single permit “Number 459″ (23 blocks measuring 14,375 ha).
PDM-Dynatec Corporation joint venture signed.
Creation of Dynatec Madagascar, SARL (DMSA).
DMSA conducts exploratory drilling and develops a thorough feasibility study and detailed environmental and social impact assessment. These are completed in 2006.
2004
Dynatec receives 53% interest in Ambatovy.
2005
Dynatec acquires remaining 47% interest in Ambatovy from Phelps Dodge.
Sumitomo Corporation of Japan takes up a 25% stake in the Project which leaves Dynatec as a 75% stakeholder.
2006
Forty-year mining permit granted.
Dynatec is named Project Operator and retains 45% ownership – later reduced to 40% when SNC-Lavalin Group Inc. (SLI) takes up 5%.
Kores Resources Corporation (KORES) joins the Project, becoming a 27.5% shareholder along with Sumitomo Corporation, 27.5%.
SLI awarded engineering, procurement, and construction management contract for development of Ambatovy.
Madagascar’s Office National pour l’Environnement (ONE) issues environmental permit.
2007
Ambatovy Project certified by the Government of Madagascar under LGIM.
Earthworks begin.
Sherritt International Corporation acquires Dynatec. Value of transaction is approximately US$1.7 billion. Sherritt assumes Dynatec’s ownership position in Ambatovy and is named Project Operator.
Construction ground-breaking ceremony held at the Plant Site on November 7.
2008
Ambatovy receives construction permits for work at the Port and Plant Site.
Closing of US$2.1 billion project financing from a group of 14 lenders. (Ambatovy named “Europe, Middle East and Africa Mining Deal of the Year” for 2007 by Project Finance International).
2009
Mine Site construction camp is ready for occupation at the end of March.
By the end of the year, construction of Ambatovy is more than 60% complete.
Employment in excess of 12,000 workers.
2010
Mining of material for stockpiling begins.
Inauguration of Ambatovy Training Center.
Port expansion completed.
Commissioning testing begins.
2011 End of construction
2012
End of Commissioning testing
Operating permit delivered
First shipment of nickel to the international market

Madagascar facts

Madagascar is the fourth largest island in the world, approximately 226,656 square miles (587,040 square kilometers). The only larger islands are Greenland, New Guinea and Borneo.
The island holds one of the world's largest reserves of ilmenite (titanium ore), as well as important reserves of chromite, coal, iron, cobalt, copper and nickel.
Madagascar currently provides half of the world's supply of sapphires, which were discovered near Ilakaka in the late 1990s.
Over 70% of the 250,000 wildlife species found in Madagascar are found nowhere else in the world.
There is a tropical rainforest on the eastern side of the island.
Millions of years ago Madagascar was part of the African continent. Over time it broke away and reached the location it is in now (approximately two million years ago).
The island has a narrow coastal plain which gets higher as it gets inland. In the center of the island are mountains.