South32 Explores Sale of Cerro Matoso Nickel Operation
Australian mining company South32 is evaluating the potential sale of its Cerro Matoso nickel operation in Colombia’s Córdoba department. The company launched a strategic review in response to structural shifts in the nickel market, citing price pressures and declining returns on ferronickel production.
While the review identified potential efficiency improvements, South32 stated that the expected returns do not justify additional capital investment at this time. As a result, the company is exploring divestment options for Cerro Matoso, with the goal of finding new ownership that may be better positioned to maximize the operation’s potential.
South32 CEO Graham Kerr confirmed the company’s intent to continue cost-cutting measures to offset lower nickel grades as outlined in the mine plan. Cerro Matoso, which produces ferronickel for stainless steel manufacturing, reported a 1% increase in nickel output, reaching 18,500 tons in the second half of 2024. The full-year production target for fiscal 2025 remains at 35,000 tons.
Financially, the mine saw underlying EBITDA rise by $22 million to $39 million, achieving an operating margin of 16%. The improvement was attributed to cost efficiencies, reduced price-linked royalties, and a weaker Colombian peso, which helped counterbalance inflationary pressures.
