South32 to sell Cerro Matoso for up to R1.78bn amid structural nickel market changes

South32 plans to sell Cerro Matoso in Colombia to a subsidiary of the global mining, industrial, and financial group, CoreX Holding, for up to $100 million (R1.78 billion) but will take a $130m impairment.

The global mining and metals company said Monday that the deal followed a review of its operations in response to structural changes in the nickel market. The transaction is expected to be finalised in late 2025.

CoreX will take control of Cerro Matoso, including all liabilities, after paying up to $80m based on future production and nickel prices, and up to $20m in four equal payments based on milestones within the next five years for the Queresas & Porvenir North nickle exploration and development project.

"The transaction is consistent with our strategy and will further streamline our portfolio toward higher-margin businesses in minerals and metals critical to the world's energy transition,” South32 CEO Graham Kerr said in a statement.

He said the deal would deliver a clean separation of Cerro Matoso and provide additional balance sheet flexibility to support investment in growth options in copper and zinc.

"Cerro Matoso has a long and proud history in Colombia. Over the coming months, we will work with the buyer, our workforce, the local communities, government, customers, and suppliers to support a successful transition of ownership," said Kerr.

As a result of the transaction, South32’s 2025 financial statements will include an impairment expense of $130m. This expense will be excluded from underlying earnings.

Reuters reported that nickel producers are currently grappling with a sharp price collapse, fueled by surging output from Indonesia, which will compel some operators to reduce spending, write down investments, or reduce their mining activities. Indonesia produces more than half the world’s nickel.

South32’s nickel production fell 6% in the nine months to March 30, 2025, due to lower planned nickel grades and pressure on nickel prices.

Another mining group with nickel operations, BHP Group, said in July 2024 that it would suspend its Australian nickel operations from October, citing a plunge in prices and a global oversupply of the metal.

CoreX is a vertically integrated global industrial conglomerate established in 2024 by Robert Yüksel Yildirim. CoreX operates across metals and mining, ports and terminals, green energy, shipping and logistics, infrastructure and construction, chemicals, and international trading.

CoreX Metals and Mining, a division of CoreX, is a leader in chromite ore mining and high-carbon ferrochrome production. The division is growing it nickel production, evidenced by the recent acquisition of Compagnie Miniere Du Bafing in Côte D'Ivoire, along with existing ownership of Golden Eagle Nickel in North Macedonia and NewCo Ferronikeli in the Republic of Kosovo.

South32’s share price eased 0.14% to R45.50 on the JSE Monday morning after the transaction was announced. The share price is about 21% lower than where it traded a year ago. In the 2024 financial year, nickel comprised some 6% of South32’s revenue.

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