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Highlights

  • South32 to incur an AUD 130 million impairment charge following the sale of its Cerro Matoso ferronickel operations.

  • The company expects to receive up to AUD 100 million in cash payments from the buyer, CoreX Holding B.V.

  • The move comes as global nickel prices remain under pressure from oversupply, particularly from Indonesia.

Australian diversified miner South32 Ltd (ASX:S32) announced on Monday that it will record an impairment charge of AUD 130 million as part of the sale of its Cerro Matoso ferronickel operations in northern Colombia. The buyer is a subsidiary of CoreX Holding B.V., a global industrial group with interests across metals and mining, green energy, and other sectors.

South32 launched a strategic review of Cerro Matoso in January 2024, citing the ongoing decline in the global nickel market as a key factor. The decision to divest the Colombian asset follows that review, and the company has now agreed to proceed with the sale to CoreX, from which it expects to receive up to AUD 100 million in cash payments.

Cerro Matoso, located in northern Colombia, has been a significant part of South32’s portfolio, producing ferronickel used in stainless steel manufacturing. However, the downturn in nickel prices, driven by a surge in global supply—particularly from Indonesia—has significantly affected the economics of the operation. Nickel producers across the globe have been impacted, leading to asset write-downs, reduced capital spending, and operational shutdowns.

In its latest quarterly update, South32 reported a 6% decline in nickel production for the nine months ending March 2025. The company attributed the fall to lower planned nickel grades and persistent market headwinds. It also reiterated that structural shifts in the nickel sector continue to exert downward pressure on prices, further influencing strategic decisions across the industry.

The broader market for nickel has seen significant volatility, with prices falling sharply over the past year. Increased production capacity in Indonesia has led to a global oversupply, weighing heavily on profit margins for many producers. This oversupply has forced several major mining companies to reconsider their exposure to the commodity.

In July 2024, BHP Group (ASX:BHP), the world’s largest-listed mining company, announced it would suspend its Western Australia nickel operations beginning October 2024. The company pointed to the dramatic fall in prices and a saturated global market as the primary reasons for the suspension.

CoreX Holding B.V., the acquiring party, is expected to take full control of the operations following completion of the transaction. The terms of payment will be structured across milestones, with the total cash consideration potentially reaching AUD 100 million, subject to agreed conditions.