South32
has filed a request for arbitration at the World Bank over a dispute with
Colombia concerning royalty payments from its majority-owned Cerro Matoso
ferronickel mine, the company confirmed on Tuesday.
In
February the Andean country’s comptroller opened an investigation into
alleged unpaid royalties of 619 billion pesos ($152.3 million) from iron
and nickel production at Cerro Matoso between 1982 and 2012.
Cerro
Matoso, one of the largest open-pit ferro-nickel mines in the world, is
located in a rural part of Cordoba province, in the north of Colombia.
During the 2019 financial year Cerro Matoso produced 41,100 tonnes of
nickel.
South32,
which was spun off from BHP Group, is primarily listed in Australia.
The
request for arbitration, filed with the World Bank’s International
Center for Settlement of Investment Disputes in accordance with the
UK-Colombia bilateral investment treaty, was submitted by South32’s UK
unit on March 27.
The
arbitration request follows a number of measures taken by Colombia, which
include “seeking arbitrarily to re-calculate royalties owed and paid by
its … subsidiary Cerro Matoso SA,” South32 said in an email to
Reuters.
On
the same day, the company withdrew its production guidance for Cerro
Matoso following restrictions placed on the mining industry by
Colombia’s government to halt the spread of coronavirus.
The
South American country’s comptroller did not immediately respond to a
request for comment.
Source:
Reuters
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