South32’s Cerro Matoso payable nickel production decreased by one per cent (or 0.5kt) to 40.6kt in FY2020 as the operation achieved a higher rate of plant utilisation and throughput, partially offsetting planned lower ore feed grades.
Cerro Matoso is an integrated nickel laterite mine and smelter located in the Cordoba area of northern Colombia, consisting of a truck and shovel open-cut mine and a processing plant. South32 owns 99.9 per cent of Cerro Matoso.
Operating unit costs decreased by eight per cent in FY20 to US$3.69/lb as a result of a weaker Colombian peso and the realisation of ongoing benefits from our energy procurement and utilisation approach.
Underlying EBIT increased by US$67 million in FY20 to US$107 million with an eight per cent rise in the average realised nickel price (+US$38 million), a weaker Colombian peso (+$27 million) and lower electricity costs (+US$9 million) partially offset by lower sales volumes (-US$8 million).
Sustaining capital expenditure increased by US$7 million in FY20 to US$39 million as long lead items were purchased for the major furnace refurbishment scheduled for the December 2020 quarter.
Cerro Matoso is a major producer of nickel contained in ferronickel which is used to make stainless steel. Ore mined is blended with ore from stockpiles, which is then dried in rotary kilns and smelted in two electric arc furnaces where ferronickel is produced.
The global production of nickel is presently used as follows: 68% in stainless steel; 10% in nonferrous alloys; 9% in electroplating; 7% in alloy steel; 3% in foundries; and 4% other uses (including batteries).