China stainless steel mogul fights to avoid a second collapse
A debt crisis is threatening the future of one of the world’s top stainless steel producers, Jiangsu Delong Nickel Industry.
Japanese trading house Sumitomo Corp plans to resume operation at its Ambatovy nickel mine in Madagascar early next year as planned, with an aim to produce 3,000 tonnes of nickel during the January-March quarter, its executive said on Friday.
Sumitomo may book an additional impairment loss on the project depending on the metal price and its output plan which is being reviewed, Hiroyuki Sugai, assistant CFO of the company, told a news conference.
The company also suspended operations its San Cristobal silver-zinc-lead mine in Bolivia but they resumed in May.
Sumitomo reported a record net loss of 60.2 billion yen ($583 million) for the first half of its financial year as it booked hefty one-off losses amid the covid-19 crisis.
It maintained its full-year forecast for a record net loss of 150 billion yen despite Sumitomo Chief Financial Officer Masaru Shiomi noting that earnings excluding one-off items had exceeded the company’s August forecasts.
“We are sticking to our full-year forecast as there is uncertainty over the pandemic and as we plan to book additional one-off losses in the second half,” he told a news conference.
For the six months to September 30, Sumitomo posted a total one-off loss of 135 billion yen, including a writedown of 25 billion yen on its stake and lending in the Bluewaters coal power station in Australia.
Having already booked an impairment loss of 55 billion yen on its 54% stake in the Ambatovy nickel mine in Madagascar in its April-June first quarter, Sumitomo warned on Friday it could book an additional impairment on the project depending on the price of the metal and its output plan, which is being reviewed.
($1 = 103.2300 yen)
(By Yuka Obayashi; Editing by Himani Sarkar and Kirsten Donovan)
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