Colombia's Cerro Matoso ferronickel mine slashes output by 50% amid gas supply dispute

Colombian ferronickel producer Cerro Matoso, owned by CoreX Holding, announced on Tuesday that it will reduce its operational capacity by half indefinitely. The move follows sustained restrictions on natural gas deliveries by Canadian supplier Canacol Energy, which are critical to the mine's production processes.

According to Cerro Matoso, Canacol Energy has maintained supply constraints, delivering less than 4,000 MBTUD---equivalent to under a quarter of the contractual volume. The Canadian firm initiated the supply restrictions on July 1, following a request filed with a Canadian court to prematurely terminate its existing gas supply agreements in Colombia.

The mine operates two production lines that rely on drying furnaces and calciners, both of which require a consistent and reliable gas supply. In response to the shortfall, the company has shifted to a daytime-only operational schedule, reducing both operating hours and workforce requirements.

This 50% capacity reduction will result in a loss of 40 tonnes of nickel per day. Consequently, the company's annual production target has been revised from an initial estimate of 32,100 tonnes down to approximately 26,000 tonnes---a decrease of about 20%.

Cerro Matoso, which employs around 2,300 workers at its open-pit mine and smelter in Cordoba, northern Colombia, stated that its current gas supply contract with Canacol Energy remains valid until 2029. In 2025, the mine produced 36,422 tonnes of nickel contained in ferronickel, marking a 10.6% decline from the 40,767 tonnes recorded in 2024. The facility remains one of South America's largest nickel mining and ferronickel operations.