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South32 reduces operations at Cerro Matoso nickel mine, withdraws guidance

South32 Ltd. said March 27 that it is withdrawing its guidance for its Cerro Matoso nickel mine in Colombia due to the uncertain impact of the production volume restriction enacted at the operation amid the coronavirus pandemic.

Colombian President Iván Duque Márquez declared a 19-day nationwide lockdown to combat the spread of the virus, effective March 24. The miner received government approval to operate Cerro Matoso at a reduced rate.

South32 withdrew its full-year 2020 guidance for its South African operations after President Cyril Ramaphosa imposed a 21-day national shutdown to curb the spread of the virus. However, its Hillside aluminum smelter and domestic output at its South Africa Energy Coal lines are considered essential for maintaining power generation in South Africa and are exempt from the lockdown.

READ MORE: Sign up for our weekly coronavirus newsletter here, and read our latest coverage on the crisis here.

The miner also expects to complete a pre-feasibility study for the Hermosa silver project in Arizona in the September quarter. South32 is working with its joint venture partner for the Eagle Downs metallurgical coal project in Queensland, Australia, to preserve the project's value beyond the investment decision scheduled at the end of 2020.

South32 suspended the remaining US$121 million of its current on-market share buyback.

The miner said it is well positioned financially to navigate through the market uncertainty caused by the coronavirus outbreak, saying measures it will enact would lower expenditures by about US$160 million over the next 15 months to protect its financial position.

In preparation for a potential extended period of low prices, the miner is reviewing activity across its operations that could reduce controllable costs.