South32 Cerro Matoso payable nickel production drops by 25%

Cerro Matoso payable nickel production decreased by 25% (or 7.7kt) to 23.2kt in the nine months ended March 2021 following completion of a major refurbishment at one of the furnaces in the quarter. FY21 production guidance remains unchanged at 34.6kt, having completed the furnace ramp-up to normalised rates.

Payable nickel sales increased by 10% during the March 2021 quarter as production volumes lifted. While its ferronickel product sells with reference to the LME Nickel index price on a M or M+1 basis it continues to attract product discounts of approximately 10%.

Following approval to develop the low capital, higher-grade Q&P project in the December 2020 quarter, which supported an increase in its FY21 and FY22 production guidance, the Ore Sorting and Mechanical Ore Concentration (OSMOC) project was approved to proceed to execution during the March 2021 quarter.

The OSMOC project is expected to deliver increased payable nickel production of up to 10% from FY23 through expanded processing capacity and improvements to the upgrading circuit to lift average ore grades. The project has an anticipated capital spend of US$24M with US$4M expected in the June 2021 quarter.

Further to the orders issued by the Constitutional Court of Colombia in April 2018, the operation was granted a new environmental licence in the March 2021 quarter. With this licence, and our ongoing provision of health care to the community members, all outstanding orders issued have been satisfied and South32 has moved to a monitoring phase.

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