Australia's South32 to appeal damages ruling in Colombia

Perth-based South32 (ASX, LSE, JSE: S32) announced today that it plans to appeal the ruling issued on March 16, 2018, by Colombia’s Constitutional Court demanding that the company paid damages to Indigenous and Afro-Colombian communities affected by its operations in the northern Cordoba province.

The court overturned a previous decision and accepted as valid arguments and evidence presented by community leaders who claimed that waste emissions from South32’s Cerro Matoso nickel mine caused skin, lung and heart problems, including lung cancer, to people in the nearby towns of Torno Rojo, Bocas de Uré, Puerto Colombia, Unión Matoso, Guacarí, Centro América, Puente Uré and San José de Uré. Villagers reportedly had high levels of nickel in their blood and urine.

The tribunal determined that Cerro Matoso, South32’s subsidiary in the country, had incurred in irregularities and had not complied with its obligation to take care of the environment. In this regard, the court recognized that Colombia’s own National Authority of Environmental Licences did identify the violations but did not enforce corrective measures.

Given this situation, South32 was requested to pay damages to the affected communities collectively through a special fund and “provide comprehensive and permanent attention to those people who suffer illnesses related to the exploitation of nickel and ferronickel.”

According to the court, the company’s licensing, obtained in 1981, did not reflect current constitutional standards for environmental protection. Thus, Cerro Matoso must re-apply.

But the company does not agree with the ruling. “We are in the process of appealing the decision. At this stage, it is not possible to fully assess any potential financial or operational impacts, as the decision orders various compensatory and remedial activities which are not yet quantifiable. Our work is continuing to understand the impact of the decision and we will advise of any material developments,” today’s statement reads.

The Australian miner did not address the accusations of environmental wrongdoing and just said that it is committed to contributing to the communities where it operates.

According to Reuters, Cerro Matoso produced 40,600 tonnes of ferronickel in 2017.