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Australian mining giant South32 has disposed of its nickel operations after rethinking the base metal's outlook.
The diversified miner will now focus solely on aluminium, alumina, copper, silver, lead, zinc, manganese and bauxite.
The move comes as major mining groups are exiting nickel amid declining prices, with Anglo American aiming to conclude the sale of its nickel business to MMG Singapore Resources for $350m in the third quarter of this year.
Nickel has plenty of applications in the energy transition, given its use as an alloy in wind, solar and geothermal power infrastructure.
However, the current oversupply of the metal, together with US President Donald Trump’s aggressive tariffs on trading partners, have seen nickel prices fall more than 13% over the past year, according to Trading Economics.
In a statement on Monday, South32 announced it would sell its Cerro Matoso nickel operation in Colombia for up to $100m (R1.78bn) to CoreX holdings.
CoreX is owned by Turkish shipping billionaire Robert Yüksel Yildirim and it has been pushing to grow its global nickel production, having recently acquired the Ivory Coast’s Compagnie Miniere Du Bafing, North Macedonia’s Golden Eagle Nickel and Kosovo’s NewCo Ferronikeli.
South32 said the transaction followed a “strategic review in response to structural changes in the nickel market”.
“The transaction is consistent with our strategy and will further streamline our portfolio towards higher margin businesses in minerals and metals critical to the world’s energy transition,” said South32 CEO Graham Kerr.
Kerr said the transaction would deliver a “clean separation” of Cerro Matoso and provide flexibility to the group’s balance sheet, allowing it to invest in copper and zinc growth options.
The opportunities in copper are clear, with demand for the metal expected to surge more than 40% by 2040, driven by the growth of electric cars, solar panels and data centres.
“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.
The market rethink comes as nickel prices are expected to remain under pressure in the near term.
The World Bank forecasts in its latest commodity markets outlook that the price of nickel will edge down over the next 18 months as tariff hikes on metal-intensive products and subdued growth in major economies curb metal consumption and dampen the demand for base metals.
Cerro Matoso has not been performing optimally either. Last year, the operation recognised a pretax impairment expense of $264m that included downgrades to its production expectations for the financial year to end-June 2025.
Cerro Matoso will be recorded as a discontinued operation until the completion of the disposal, which will result in an impairment expense of $130m in the group’s financial statements for the year to end-June.
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