Implats has announced it is detaching from the Ambatovy nickel project in Madagascar.

In a statement issued yesterday the world's second biggest mining firm revealed that it would pay up to $25 million to exit the deal, deeming it unprofitable.

While acknowledging the potential of the site the platinum miner said it was simply unfeasible in light of its strategic targets.

"Internationally, both the capital and production costs relating to mining projects have escalated since the initial feasibility study was completed in February 2005," the firm said.

"While there still were synergies for Implats' own nickel production cost profile, in Implats view, the project as a whole would not meet Implats' hurdle rates."

Meanwhile, chief executive Keith Rumble told Moneyweb that despite the exit, there remained money for investment in the firm.

"We're sitting on R4 billion of cash at the moment," he revealed.

"We're still investing quite heavily in the South African platinum operations, both in the new deep-level shaft in Rustenburg and in some of the Eastern Bushveld projects," he added.

"And then again, the Zimbabwean project is one that has an appetite for cash. But I don’t think that those projects are sufficient to soak up all the cash. So we will have to look carefully at our balance sheet and see how we handle that going forward."


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