Slumping nickel prices and mounting costs are threatening the massive Ambatory mining project in Madagascar, owned 40 per cent by Sherritt International with Montreal’s SNC-Lavalin Group, Somitomo of Japan and Korea Resources as partners.

Sherritt’s CFO Dan Chambers said:

Ambatory now has an estimated capital cost of more than $3.5 billion U.S. and restructuring is urgently needed. Even if we could finance a project of $3.5 billion to $3.7 billion U.S., I wouldn’t do it because I won’t bet our balance sheet on the metal prices needed to amortize it.