Madagascar Junta Tightens Control Over Strategic Minerals Amid Sumitomo Exit

Madagascar's transitional government is intensifying state control over the mining sector to revitalize the national economy, aiming to capitalize on the global demand for strategic minerals. However, this strategy faces significant challenges following the announcement by Japanese conglomerate Sumitomo of its total withdrawal from the Ambatovy nickel mine project on May 1, 2026. Sumitomo sold its 54.17% stake under unfavorable conditions, paying the buyer 67 billion yen, a move that sends a negative signal to potential investors. The Ambatovy mine, one of the world's largest open-cast nickel operations, has suffered from operational difficulties, falling global prices, and recent damage to its pipeline caused by Cyclone Gezani in February 2026. With mining previously contributing nearly half of export revenues, the departure of a historic shareholder like Sumitomo undermines the junta's efforts to attract new foreign investment. The remaining shareholder, Korean company Komir, continues to hold its position, but the overall instability raises concerns about the future of Madagascar's critical mining industry amidst political transition and economic pressure.