By Charles Pitts
TOAMASINA, Madagascar : Ambatovy, one of the world’s largest high-pressure acid leach (HPAL) operations, has officially resumed nickel and cobalt production following a multi-month suspension caused by the destructive path of Cyclone Gezani. The joint venture, operated by Sumitomo Corporation alongside the Korea Mine Rehabilitation and Mineral Resources Corporation (KOMIR) and the Government of Madagascar, successfully brought its critical sulfuric acid plant and HPAL circuits back online this week, signaling a turning point for the project’s 2026 recovery.
The facility, which integrates a massive open-pit mine at Moramanga with a sophisticated refinery and port complex in Toamasina via a 220-kilometer slurry pipeline, was forced to halt operations in February 2026. Cyclone Gezani brought record-breaking winds and flooding to Madagascar’s eastern coast, causing material damage to the project’s utility infrastructure and port-linked logistics. After months of damage assessment and technical repairs, management has confirmed that the refinery is once again processing ore, with a goal of reaching stable run rates by the end of June.
The Technical Recovery: Restarting the HPAL Circuits
The restoration of the sulfuric acid plant was the primary bottleneck in the recovery process. HPAL technology relies on a continuous supply of high-purity sulfuric acid to leach nickel and cobalt from laterite ores under extreme pressure and temperature. Damage to the acid plant’s cooling systems and storage tanks during the cyclone necessitated a complete overhaul of the utility feed lines.
According to technical reports from the site, the restart sequence began in late May with the warming of the acid plant’s reactors, followed by the gradual re-pressurization of the HPAL autoclaves. As of June 12, 2026, all major leaching circuits are operational. The company is now focused on optimizing the feed rates from the slurry pipeline, which underwent extensive integrity testing following the storm to ensure that landslides along the 220-kilometer route had not compromised the structural integrity of the buried conduit.
The operational restart is being managed under strict safety protocols to avoid the mechanical malfunctions that hindered the project’s performance in previous years. In 2024 and 2025, Ambatovy struggled with equipment reliability, producing 31,000 tonnes and 28,000 tonnes of nickel respectively, well below its 60,000-tonne nameplate capacity. The post-cyclone rebuild provided an opportunity for engineers to implement “resilience upgrades” designed to better withstand the increasingly volatile weather patterns in the Indian Ocean.
Production Targets and the June Run Rate
Management has set ambitious targets for the remainder of the month. The refinery aims to hit a run rate by late June that aligns with an annualized production target of approximately 35,000 tonnes of nickel and 3,000 tonnes of cobalt. While the cyclone disruption makes achieving the original pre-storm 2026 guidance unlikely, the successful restart provides much-needed clarity for critical minerals markets that have been bracing for a prolonged supply gap from Madagascar.
| Metric | Pre-Cyclone 2026 Target | Revised 2026 Outlook (Est.) |
|---|---|---|
| Nickel Production (tonnes) | 35,000 | 22,000 – 25,000 |
| Cobalt Production (tonnes) | 3,000 | 1,800 – 2,100 |
| HPAL Capacity Utilization | 58% | 35% – 40% |
| Export Logistics | Fully Operational | Gradual Ramp-up |
The return of Ambatovy’s output is particularly significant for the European and Japanese stainless steel and battery sectors, which rely on the project’s high-grade Class 1 nickel briquettes. Unlike the lower-purity nickel pig iron (NPI) that dominates the Indonesian market, Ambatovy’s product is essential for specialized alloys and high-nickel NMC (nickel-manganese-cobalt) battery chemistries.
Nickel Market Outlook 2026: Supply Discipline and Geopolitical Risks
The Ambatovy restart comes at a pivotal moment for the global nickel market outlook 2026. Throughout the first half of the year, nickel prices have traded in a range between $17,500 and $19,500 per tonne, supported by Indonesia’s shift from volume-driven production to price-supporting supply discipline.
Indonesia, which now controls roughly two-thirds of the world’s nickel supply, has implemented more stringent annual mining quotas (RKAB) in 2026 to curb the oversupply that plagued the market in 2023 and 2024. This “policy floor” has raised the marginal cost of production globally, making high-cost HPAL projects like Ambatovy more economically viable in the current price environment. However, the market remains sensitive to disruptions. The three-month absence of Ambatovy’s supply contributed to a temporary tightening of the LME (London Metal Exchange) stocks, highlighting the vulnerability of the global supply chain to concentrated regional risks.
Analysts suggest that the nickel market in 2026 will remain in a “fragile balance.” While the Indonesian supply remains the dominant factor, the successful recovery of Tier 1 assets outside of Southeast Asia is critical for Western OEMs (Original Equipment Manufacturers) seeking to diversify their critical minerals sourcing under the Inflation Reduction Act (IRA) and similar EU regulations.
Logistics and the Madagascar Corridor
The logistical complexity of Ambatovy cannot be overstated. The project relies on a 220-kilometer pipeline to transport ore from the high-altitude mine site to the coastal refinery. Cyclone Gezani’s impact on the Toamasina port: Madagascar’s primary maritime gateway: initially prevented the export of existing stockpiles even after the mine itself was secured.
“The recovery wasn’t just about the refinery; it was about the entire corridor,” stated a source familiar with the operations. The port of Toamasina has undergone significant dredging and debris removal to allow the large bulk carriers required for nickel and cobalt exports to dock safely. With the port now operational and the refinery producing, the first post-cyclone shipments are expected to depart by the third week of June.
Cobalt and the Energy Transition Nexus
While nickel leads the headlines, Ambatovy is also a top-10 global producer of cobalt. In the current energy transition landscape, cobalt demand remains robust, though it faces headwinds from the rapid adoption of LFP (lithium iron phosphate) batteries, which contain no cobalt.
Despite the rise of LFP, high-performance electric vehicles and aerospace applications continue to drive demand for the high-purity cobalt rounds produced in Madagascar. The Ambatovy restart ensures that approximately 3% of the global cobalt supply returns to the market, providing a buffer against the high concentration of cobalt production in the Democratic Republic of Congo (DRC).
Operational Monitoring and Future Resilience
Inside the refinery, the control room has been the nerve center of the restart. Operators are monitoring thousands of sensors across the HPAL and acid plants to ensure that the delicate balance of chemistry and pressure is maintained. The integration of real-time data analytics has been a key part of the 2026 upgrade, allowing the team to identify potential equipment fatigue before it leads to the kind of catastrophic failures seen in the project’s early years.
The recovery of Ambatovy is a case study in the consolidation or perish reality of modern mining. Maintaining such a complex facility in a region prone to tropical storms requires immense capital and technical expertise. For Sumitomo and its partners, the 2026 restart represents a multi-billion dollar bet on the long-term necessity of nickel and cobalt for the global economy.
Outlook for H2 2026
As Ambatovy ramps up toward full capacity, the focus for investors and analysts will shift to the project’s ability to maintain “steady-state” operations through the remainder of the year. The Madagascar government, which holds a significant stake in the project, views the restart as essential for the country’s macroeconomic stability and foreign exchange earnings.
For the global nickel market, the return of Madagascar’s output adds a layer of supply security at a time when geopolitical tensions and trade barriers are reshaping mineral flows. While the 2026 nickel market outlook remains centered on Indonesia, the resilience of projects like Ambatovy will determine the diversity and stability of the global energy transition.
“The successful restart of Ambatovy is more than just an operational milestone,” noted a senior commodity analyst. “It is a signal that the industry is learning to navigate the dual challenges of complex HPAL technology and extreme climate events. In the 2026 market, resilience is as important as resource grade.”
