IN SHORT: Sumitomo Corporation is paying $418 million to exit the Ambatovy nickel and cobalt mine in Madagascar after accumulating $2.6 billion in cumulative losses over two decades. The buyer is a Jersey-based consortium called AMRI, led by former Glencore nickel trading head Jason Kluk through his vehicle Essenwood Partners and South African billionaire Sandile Zungu’s Zungu Investments Company. The deal is expected to close by September 2026 and represents Zungu’s first significant African mining investment outside South Africa.
Sumitomo is walking away from one of the world’s largest nickel laterite operations after a twenty-year, three-billion-dollar ordeal that never achieved stable production, and paying nearly half a billion dollars to do so, handing control to a South African-anchored consortium led by a former Glencore nickel trader who is betting that operational expertise and a nickel price recovery can extract value from an asset that defeated one of Japan’s most sophisticated trading houses.
The transaction was announced on May 1 and reported by Reuters, Mining.com and Billionaires.Africa. Sumitomo will record a loss of approximately 70 billion yen ($447 million) in its April to June 2026 quarter as a result of the divestment.
- Ambatovy is one of the world’s largest nickel laterite operations, located in Madagascar’s Toamasina region. Sumitomo has held a 54.17% stake since 2005, with South Korea’s Korea Mine Rehabilitation and Mineral Resources Corporation (KOMIR) holding the remaining 45.83%. KOMIR is not part of the transaction and retains its stake. The total capital invested by Sumitomo over two decades was approximately $3 billion. The cumulative losses of 400 billion yen reflect a project that produced real output but never achieved the cost structure needed to generate returns at the nickel prices that prevailed through most of its operational life.
- Jason Kluk is the operational anchor of the AMRI consortium. He served as head of nickel trading at Glencore, one of the world’s largest commodity trading houses, before departing in late 2024. His experience covers exactly the kind of large-scale, technically complex nickel laterite processing that Ambatovy requires. Jersey and UK corporate registration documents reviewed by Reuters show Kluk as a director of Essenwood Partners, which controls more than 75% of the AMRI consortium vehicle. The Billionaires.Africa analysis described him as bringing “strong technical capabilities and industry networks” that Sumitomo had identified as essential to any credible continuation of the project.
- Sandile Zungu brings the South African anchor and the capital weight. Zungu Investments Company holds stakes in South African thermal coal assets and owns AmaZulu Football Club. The Ambatovy acquisition is Zico’s entry into the critical minerals supply chain and its first meaningful African mining investment outside South Africa’s borders. At a moment when nickel and cobalt are both central to the energy transition narrative, positioning a South African investment firm as a major holder of one of the world’s largest nickel laterite assets carries strategic significance beyond the immediate financial transaction.
- The timing is better than it looks. Nickel prices surged to two-year highs in late April and early May 2026, driven by supply constraints from Indonesia, where the government has been restricting ore exports, and by geopolitical tensions affecting sulphur supplies needed for nickel refining. Ambatovy produced approximately 28,000 tonnes of nickel and 2,500 tonnes of cobalt in 2024, well below its nameplate capacity. Operations were suspended in February 2026 ahead of Cyclone Gezani and are expected to resume between May and June 2026. Kluk and Zungu are acquiring an asset that is temporarily offline but operationally intact.
- The deal structure is notable: Sumitomo is effectively paying to leave rather than receiving a premium for a strategic asset. The $418 million represents foregone value, effectively a payment by Sumitomo to transfer a complex liability off its balance sheet and onto buyers who believe they can operate it profitably at current nickel prices and with better operational execution. Sumitomo retains certain nickel offtake rights under the deal, suggesting it still wants commercial exposure to Ambatovy’s output without the operational headache of ownership.
- Madagascar’s dependence on Ambatovy makes the transaction consequential for the country’s economy. The mine has been a significant contributor to Madagascar’s export revenues, employment and foreign exchange earnings. Government and IMF observers will watch the new ownership closely: a mine restart under competent operators restores those contributions; a further operational failure would be damaging for an economy that already faces significant poverty and infrastructure challenges.
Billionaires.Africa: “The Ambatovy deal represents Zico’s first significant African mining investment outside South Africa and its entry into the critical minerals supply chain at a moment when nickel, cobalt and other battery materials are attracting serious attention from investors positioning themselves for the energy transition.”
The Bigger Picture: The Ambatovy transaction is a study in what it takes to turn a technically viable African mining asset into a commercially viable one. Sumitomo had the capital and the technical credibility, but the combination of nickel price cycles, cyclone damage, pipeline ruptures and chronic underproduction defeated a company with vast resources and deep mining experience. Kluk and Zungu are buying on the thesis that a leaner, more operationally focused ownership structure, combined with improved nickel prices and a fresh operational mandate, can extract value that three billion dollars of Sumitomo capital could not. They may be right. The asset is real. The nickel is in the ground. The question, as always with Africa’s mineral wealth, is execution.
Source: Billionaires.Africa / Mining.com / Kitco News, May 1-5, 2026
