Business Profiles

Ambatovy: More than a nickel

When great minds come together, life-changing things can be achieved. When these minds are at the helms of three independently successful companies, it is hard to place limits on the joint venture they could produce. Ambatovy was born out of such a collaboration; the ambitious mining operation was founded as an international effort by three companies who saw an opportunity overseas and seized it. This opportunity was an untapped nickel deposit of incredible size, and the place was Madagascar.

Ambatovy has many claims to fame – the mining venture is one of the most ambitious industrial operations not only in Madagascar, but all of Africa and the Indian Ocean Region. It is also the largest foreign investment ever made in the country, totaling a whopping US$8 billion. Ambatovy’s founders weren’t holding back, and with good reason; the operation is in a strong position to become the world’s biggest lateritic nickel mine, with tonnes of refined cobalt and agricultural fertilizer thrown in as a profitable bonus.

The companies positioned to benefit, and the three that made this all possible, are Sherritt International Corporation, Sumitomo Corporation, and Korea Resources Corporation (KRC), from Canada, Japan and Korea, respectively. As well as turning an extremely healthy profit, the founding companies hope Ambatovy will contribute to sustainable development in Madagascar, which they hope to achieve largely through the huge boost the project has and will continue to be to the country’s economy. Explorations and the construction of infrastructure came to a head in 2012, with production testing being completed in 2014 and financial completion achieved in 2015. The mine is now fully operational, and is predicted to soon yield 60,000 tonnes of refined nickel. 5,600 tonnes of refined cobalt and 210,000 tonnes of ammonium sulphate fertiliser every year – a bounty which is predicted to last for the next three decades.

With figures like this, it’s no wonder that Sherritt, Sumitomo and KRC invested so heavily in the venture, and it is also no surprise that Ambatovy predict prosperity for Madagascar off the back of it. The output will make nickel Madagascar’s new top export, which will have a dramatic ripple effect on its economy. As well as taxes on these profitable exports, the construction and now operation of this mine has naturally led to vast amounts of job creation, as well as investment in the country’s wider infrastructure, education and health-related programmes to assist and aid Ambatovy’s employees.

As well as a hefty output, Ambatovy is a notable undertaking for Madagascar in terms of physical size. As well as the mine site itself, an ore preparation plant needed to be constructed and staffed, as well as a new pipeline, the wider Plant Site, a Tailings facility and additions to the Port of Toamasina. Not stopping here, Ambatovy also invested in better tying its new commodities together, including the laying and upgrading of numerous roadworks across Madagascar. Some of these roads had been closed since 1969, but thanks to Ambatovy, now allowed eleven remote rural communities to have finally have easy access to markets and essential services. The company even invested in even the creation of an entirely new 12 km railway line, now operated and maintained by Madarail. Even though the new line ran completely parallel to an existing one between the Port and the Plant Site, the new one was needed in order to create the capacity that would be needed for the mine’s tremendous forecasted output.

So what lies behind this predicted profit? The mine site itself is located 80 km east of Antananarivo, Madagascar’s capital. Two large lateritic nickel, about 3km apart from each other, combine to represent one of the world’s largest lateritic nickel reserves, covering an area of about 1,600 ha with depths ranging from 20-100 m. Operations are made simpler by the soft nature of the ore, meaning that blasting does not need to be used. Instead, the resource is surface-mined by hydraulic excavators and delivered to the Ore Preparation Plant (OPP) for processing. Here, the soft lateritic soil is separated from rock and waste material, and then mixed with water so that it can be transported via Ambatovy’s pipelines in the form of a slurry. The pipes are able to shoot 826 tonnes of this slurried ore to the plant site per hour. ‘Shoot’ may be the wrong word, as this sluggish material travels 220 km downhill to the site at just over walking pace, making the total journey time approximately 30 hours!

This precious pipeline is, like pipelines the world over, at risk from vandals if not protected – this is why it was constructed using a standard ‘cut and cover’ method to an average depth of 1.5 m. In certain areas, Ambatovy drilled horizontally beneath the surface, leaving stretches of Madagascar’s scenic rivers and forests untouched. Where this wasn’t possible, extensive work has already been done to restore the landscape to its original state.

Once at the Plant Site, the ore undergoes the hydrometallurgical process, a series of steps involving water and chemical compounds on the soil to eventually yield refined nickel and cobalt. However, ingeniously, as a part of the company’s dedication to sustainable business and returns, this ore is not the only product used from the mine. Ambatovy doesn’t even let the waste go to waste – instead, the soil’s waste materials are the source of the mine’s bonus third resource – the ammonium sulphate fertiliser.

Even the materials Ambatovy can’t use aren’t left behind; anything left over that holds no sale or industrial value is known as ‘tailings’. These materials are mixed with limestone to neutralise them, and shipped to the company’s purpose-built tailings facility. This is a secure area where treated residue is discharged for permanent safe-keeping according to the highest international standards and requirements. In essence, the materials are buried and covered by shallow lakes which, over time, inevitably fill as more rocks and similar materials are added. As this happens, the excess water is sent to the ocean. Due to the materials below its surface, this water has a high mineral content, but it is both similar to that of seawater, and any difference is quickly absorbed by the vastness of the ocean. When a Tailing site is completely filled by rocks in this manner, it is reclaimed, and work will begin to restore it as a seamless part of the natural landscape once more.

Before Ambatovy, Madagascar had limited infrastructure, not only in terms of systems that could support the mine’s operations, but in terms of the residents’ lives as a whole. From three foreign investors, the country has been boosted industrially and economically, as well as gaining other life-changing benefits such as a new water treatment plant, plants to produce oxygen, hydrogen, sulfuric acid, and hydrogen sulfide, a power plant and a fully equipped, professionally staffed medical clinic. The jobs, roads and tax money the company brought with them would be boost enough, but across the board, Ambatovy have gone out of their way to help their community at the same time as themselves. The mines they operate have a phenomenal output that will continue to do good for Madagascar for the three decades they yield, and the domino-effects of this will carry on for far longer. Who knows what other operations and developments will become possible in the country off the back of the opportunities and resources Ambatovy can create?