South32 offloads Cerro Matoso nickel mine to double down on copper and zinc strategy

Australian miner South32 has reached a binding agreement to sell its Cerro Matoso ferronickel mine in Colombia to CoreX Holding’s subsidiary, in a deal that could total up to US $100 million. The upfront payment is nominal, while the remainder is contingent on future nickel production, market prices, and permitting. Up to US $80 million is tied to output and market rates, with another US $20 million dependent on completing permitting milestones at the mine’s Queresas & Porvenir North project over the next five years.

The decision comes amid a structural shake-up in the nickel market, where a flood of Indonesian supply has depressed prices and squeezed global margins. South32’s nickel output at Cerro Matoso dropped 6% to 27.4 kilotonnes in the nine months leading to March, and ferronickel products have been trading at significant discounts to standard LME nickel.

CEO Graham Kerr stated that the divestment aligns with South32’s long-term strategy to streamline its portfolio and focus on high-margin, future-facing base metals—primarily copper and zinc. The capital unlocked from this transaction is expected to support growth in the company’s copper assets, including the Sierra Gorda project in Chile and the Taylor zinc-copper-silver development in Arizona.

The sale will be treated as a discontinued operation in the company’s FY 2025 financial statements, and is expected to result in a non-cash impairment charge of approximately US $130 million. This charge, however, will be excluded from underlying earnings. The transaction includes the transfer of all liabilities and is expected to close later in 2025, subject to international regulatory approvals and final corporate procedures.

CoreX, founded in 2024, has rapidly expanded its global presence in the nickel industry with new operations in West Africa and Europe. The acquisition of Cerro Matoso strengthens its foothold in ferronickel production and aligns with its aggressive global growth strategy.

Context and Outlook

• Nickel Price Pressures: The global nickel market has been under pressure due to oversupply, particularly from Indonesia. This has forced producers to reconsider their nickel portfolios and, in some cases, suspend operations.

• Shift Toward Energy Transition Metals: South32’s reallocation of resources signals a clear pivot toward metals that are critical for clean energy technologies, such as copper and zinc, which are expected to see strong demand growth in coming decades.

• Cerro Matoso Legacy: Operating for nearly four decades, Cerro Matoso has been a major economic contributor in northern Colombia. The mine includes an open-pit operation and associated processing facilities. CoreX has committed to engaging with local communities and maintaining environmental and labor standards during the transition.

Implications

• For South32: The sale allows South32 to sharpen its strategic focus and deploy capital in more promising markets with better long-term prospects. It also reduces exposure to volatile nickel prices.

• For CoreX: The acquisition enhances CoreX’s global nickel presence and expands its portfolio at a time when other majors are retreating due to cost pressures.

• For the Mining Sector: The transaction reflects the broader trend of portfolio optimization, where miners seek to shed non-core or underperforming assets and reorient toward minerals with stronger future demand.