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Fire shut Sumitomo's Ambatovy nickel plant for 2 weeks in February

Published 2019-03-20, 09:49 a/m
Updated 2019-03-20, 09:50 a/m
© Reuters.  Fire shut Sumitomo's Ambatovy nickel plant for 2 weeks in February

* A fire at hydrogen plant in Ambatovy kills one person

* Sumitomo cuts Ambatovy's nickel output estimate in early Feb

* May miss its revised annual output target due to shutdown

TOKYO, March 20 (Reuters) - Japanese trading house Sumitomo Corp 8053.T said on Wednesday its Ambatovy nickel plant in Madagascar was forced to shut for about two weeks in early February due to a fire at a hydrogen plant, meaning it may miss its revised annual production target.

The fire broke out due to a hydrogen leak when a valve was being replaced during maintenance, a Sumitomo spokesman said.

One person died from the accident and there were no other injuries, he added.

Sumitomo owns a 47.7 percent stake in Ambatovy, while South Korea's Korea Resources Corp KOREC.UL and Canada's Sherritt International Corp S.TO are partners in the project.

Sumitomo booked one-off losses of about 15 billion yen ($134 million) on the Ambatovy nickel-cobalt project in the October-December quarter. It also, in early February, cut Ambatovy's nickel output estimate for the current year to March 31 to 38,000-40,000 tonnes from 40,000-43,000 tonnes. the trouble occurred after our earnings announcement...Ambatovy's annual nickel output may come below our latest forecast," the spokesman said, without giving more details.

The two-week shutdown has also affected cobalt output, a byproduct of nickel mining, he said, adding that the accident had been reported to local authorities.

Sumitomo and its partners have been suffering losses from Ambatovy as the $8 billion project struggled to ramp up. Nickel prices have also slumped CMNI3 .

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For the nine months to December 31, 2018, Ambatovy booked a loss of 31.5 billion yen, against 9.6 billion yen loss for the same period a year earlier, according to Sumitomo. ($1 = 111.5500 yen)

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