Special report

Ambatovy - the facts

Facts & figures relating to the Ambatovy mining project in Madagascar.

Ambatovy is a US$5.5 billion enterprise held by four shareholders: Sherritt International Corporation, the project’s operator, which owns 40 percent of the shares; Sumitomo Corporation and Korea Resources Corporation, each holding 27.5 percent stakes; and SNC-Lavalin Incorporated, the project’s engineering contractor, which owns 5 percent.

The project has required a great deal of financial traction to get off the ground. Ambatovy has received US$2.1 billion in debt financing from 14 lenders. This consortium includes government-sponsored export credit agencies, international development banks, and commercial banks from around the world. Ambatovy’s financing arrangement was named the “Europe, Middle-East and Africa Mining Deal of the Year” in 2007 by Project Finance International and represents the largest-ever project financing in sub-Saharan Africa.

  • African Development Bank
  • European Investment Bank
  • Export Development Canada
  • Export-Import Bank of Korea
  • Japan Bank for International Cooperation
  • Bank of Tokyo Mitsubishi UFJ
  • BNP Paribas
  • Crédit Agricole CIB
  • ING Bank N.V.
  • Mizuho Corporate Bank
  • Shinhan Bank
  • Société Générale
  • Sumitomo Mitsui Banking Corporation
  • Woori Bank

Under the terms of the lending agreement, Ambatovy is required to adhere to stringent national and international standards for environmental management, social engagement, and other business practices. These standards include the Equator Principles and the World Bank Group’s International Finance Corporation Performance Standards. Ambatovy is audited several times per year by third-party experts who report to the lenders.

The mine
Ambatovy’s mine site is located near Moramanga, a city 80 kilometres east of Madagascar’s capital city, Antananarivo.

The mine is located in the central highlands of Madagascar and is connected by a 220 kilometre underground pipeline to a processing plant just outside Toamasina, the country’s main port city.

Nearly 22,000 lengths of 60 centimetre pipe were welded together to construct the pipeline, which is able to carry over 800 tonnes of slurry per hour.

When fully operational, Ambatovy will have the capacity to produce 60,000 tonnes of finished nickel, 5,600 tonnes of finished cobalt, and 210,000 tonnes of ammonium sulphate fertiliser annually over its 30 year life.

Community commitment
The operational phase is expected to provide long-term employment for 6,000 people, with 2,500 directly employed by Ambatovy and 3,500 by the contractors.

In 2008, Ambatovy’s Local Resources Development Initiative evolved into ALBI, the Ambatovy Local Business Initiative.ALBI was created to fulfil Ambatovy’s commitment to a ‘buy locally, hire locally’ policy.

Ambatovy had signed more than $1.2 billion in local contracts by the end of 2010. In 2011 alone, Ambatovy spent $220 million on local purchases. More than 500 SMMEs across 54 sectors have been awarded purchase orders by Ambatovy; meanwhile, ALBI has more than 2,000 local businesses registered in a database used by Ambatovy and its sub-contractors.

The Business Training Centre, located in Toamasina, is a collaborative effort between Ambatovy, the International Finance Corporation (IFC) and Training Management Africa (TMA).

In 2010 Ambatovy began a collaboration with UNICEF to finance the Contract for School Success programme (Contrat Programme de la Réussite Scolaire, or CPRS).

Ambatovy’s archaeological team has discovered 96 key archaeological sites and collected more than 4,500 artefacts. Between 2005 and 2010 in areas between Moramanga and Toamasina the team found 4,207 clay potteries and 192 imported ceramics. Among the 262 cultural heritage sites catalogued were 126 archaeological sites, remains of 22 ancient villages, 23 burial sites, 55 sacred sites and 36 sacred stones, the oldest of which date back to the 13th century and the most recent to the 19th century.

Management plans have been produced in respect of water, air, noise, soil, waste, flora, fauna and aquatic resources, and are designed to preserve the environment and advance scientific knowledge.

Ambatovy works in close collaboration with the ONE (Office National pour l’Environnement), which must approve all environmental plans before implementation.

Since 2007, a total of 140 lemurs belonging to seven species living in and around the cleared forest and refuge areas have been equipped with radio collars. Since 2009, a total of 35 new-born lemurs have been observed within Ambatovy’s conservation areas. Thirty three species of mammals other than lemurs are also monitored by the project.

Ambatovy’s amphibian and reptile management programme carries out pre-clearance species inventories and salvages live animals to conservation forest refuge areas. Between 2007 and 2010 the program salvaged more than 14,000 reptiles (54 species) and amphibians (55 species) and it will continue until forest clearing operations have been completed.

A specific conservation programme has been developed for the endangered frog golden mantella (mantella aurantiaca). Ambatovy considers mantella aurantiaca as a flagship species for its conservation efforts.

With the help of the Missouri Botanical Garden, Ambatovy has identified plant species known to exist only within the mine footprint and one or two other sites in Madagascar. These plants are categorized as Species of Concern (SOC). From an initial list of 173 SOCs, the number still requiring special salvaging has been reduced to eight species and is expected to descend to zero as the offsite surveys continue.