Sumitomo Metal Mining is set to exit the nickel exploration project in the Solomon Islands due to falling nickel prices and unfavourable business conditions.
The company began its acquisition of prospecting licenses and exploration activities in 2005 via its subsidiary SMM Solomon (SMMS), which became embroiled in a legal battle with Axiom KB in connection with the international tender areas in Isabel province.
SMMS sought legal action after the leasing rights awarded to the company were cancelled. The proceedings lasted six years and ran until March, and ultimately resulted in neither party being granted the rights to the disputed area.
The company cited several factors as justification for its decision to withdraw from the Solomon Islands, including projected uncertainty in market conditions and the outcome of the court case.
Sumitomo Metal Mining said in a statement: “We deeply appreciate the support and cooperation of the Government and the landowners and residents of the Solomon Islands for the Solomon Exploration Project and other related matters.”
The company noted that the decision to withdraw from the project will not significantly impact its financial results.
It further stated that all pending applications for mining leases in the region will be dropped.
SMM is now set to focus on securing new nickel resources through projects in the Philippines and Indonesia, and other activities.
SMM operates the Hishikari gold mine in Japan and also possesses copper and nickel mining assets in other countries, including the US, China, Peru, Philippines, Chile, Australia and Indonesia.