TORONTO (miningweekly.com) – Shipments of diversified miner Sherritt International’s Ambatovy subsidiary have ground to a halt at a port in Madagascar, after the subsidiary became subject to new duties earlier this month, impacting almost all imports and exports.
News agency Reuters reported Thursday that under the new $100 Advanced Cargo Declaration levy placed on every container shipped through the country’s ports, goods had been stranded in the island nation’s east-coast port of Toamasina.
The news agency reported that Ambatovy management had given the impression that the nickel/cobalt-producing operation would grind to a halt in a week, should the dispute not be resolved soon.
A Toronto-based Sherritt spokesperson on Thursday declined to confirm the imminence of the operation's shuttering.
He explained to Mining Weekly Online that the company believed Ambatovy was exempt from the new shipping tax under the country’s preceding Large Mining Investment Act, which it believed was still governing the Ambatovy operations.
“Ambatovy is exempt from taxation above and beyond the terms originally agreed on. In fact, in December, when the government first attempted to implement this new declaration, Ambatovy was issued a temporary exemption. It is our expectation that the exemption will be made permanent and that Ambatovy’s local leadership is in conversation with the highest levels of government to ensure the law is being properly applied,” stated Scott Tabachnick in response to questions.
The $8-billion Ambatovy mine was 40% held by operator Sherritt International, 32.5% by Sumitomo Holding and 27.5% by Korea Resources.
During the fourth quarter, Sherritt booked a $1.61-billion impairment charge on its 40% share of the Ambatovy operation, citing lower nickel prices.
For the three months ended December 31, Sherritt reported a wider adjusted net loss of $113.8-million, or $0.38 a share, as nickel spot prices hit multiyear lows of $3.70/lb in the fourth quarter, and it had since traded lower in February to levels not seen since 2003.