Posted on 24 Jan 2024
Australian miner South32 has put its Colombia nickel unit under review amid falling nickel prices, Kallanish notes.
“Along with the group-wide cost review, we have commenced a strategic review of Cerro Matoso to evaluate options to enhance the operation’s competitive position,” South32 says in a statement.
According to the firm, price realisations for its ferronickel product for H1 HY24 (ended 31 December 2023), reflected a discount of 29% to the LME Nickel Index, as structural changes in the nickel market continued to place pressure on both nickel prices and discounts for our ferronickel product.
Cerro Matoso payable nickel production decreased by 10% year-on-year to 18,300 tonnes in the half-year period. As for the December quarter, its nickel production improved by 20% y-o-y to 10,000 t following the completion of planned maintenance and a temporary reduction in third-party gas supply in the prior quarter.
The unit’s payable nickel sales fell 9% y-o-y to 18,000 t in H1 FY24, but increased 12% y-o-y to 9,500 t in Q2 FY24.
Despite the asset’s strategic review, South 32 has maintained its Cerro Matoso nickel production guidance unchanged at 40,500 t in FY24. Higher nickel grades are expected in the second half of the year.
The Cerro Matoso is estimated to have an operating unit cost guidance of $5.30/lb this financial year. Its average realised price (payable nickel) was $6/lb in H1 FY24, compared to $9.05/lb in H1 FY23.
Source:Kallanish
