Sumitomo announced its withdrawal from the Solomon Islands Nickel Exploration Project

Sumitomo Metal Mining Co., Ltd. (Sumitomo Metal Mining Co., Ltd.) said today that the company decided to withdraw from the island because of the nickel price crash and the legal disputes caused by the mining rights and interests of the Solomon Islands Nickel ore exploration project.

Sumitomo began its exploration operations in Solomon Islands in 2005 and has been engaged in a six-year legal tug-of-war with Axiom Mining in Australia, which ended in this year, with the outcome that both companies were not fishing in Isabel Nickel mining rights.

“According to our comprehensive review of the business environment, the final decision of the legal process and the judgment of other factors, we have come to the conclusion that it is difficult for us to implement the project,” Sumitom said in a statement.

“We will withdraw all pending mining leases and will be completed by the end of December this year,” the company spokesman said.

Currently, Sumitomo declined to disclose its exploration costs and litigation costs, but said the exit would have a slight impact on its fiscal year ended March 2018.

“Despite the resurgence of the market, the project will be difficult to implement because of the undeveloped nature of the Solomon Islands’ social and legal systems,” the spokesman said.

Sumitomo plans to increase the annual production target of nickel from 20 million tons to 150,000 tons by 2021. The company said it will continue to seek new nickel assets through projects in the Philippines and Indonesia.