Cerro Matoso has reduced its nickel production operations in Córdoba, Colombia, following a significant cut in natural gas supply from Canacol Energy.

The production drop threatens the local economy and the stability of the nickel supply chain, as the company faces massive financial losses and potential layoffs.

The operational reduction began on July 1, 2024 [1]. Reports on the scale of the cut vary, with some sources stating the company reduced operations by 25% [1], while others indicate operations were cut to 50% [2]. This instability stems from Canacol Energy limiting the gas supply to 7,000 MBTU, which is approximately 55% of the usual volume [1].

Cerro Matoso said these restrictions could lead to daily financial losses of $3 billion [2]. The company also said 220 jobs are potentially affected by the decreased capacity [2]. The gas shortage has forced the plant to operate well below its intended production levels, a situation that puts the facility's economic viability at risk.

Canacol Energy's decision to limit the supply has created a critical bottleneck for the nickel plant. While the company seeks solutions to stabilize its energy intake, the immediate impact is a reduced output of essential minerals used in global technology and infrastructure.

The situation in Córdoba highlights the vulnerability of heavy industrial operations to energy supply fluctuations. As the company navigates these restrictions, the risk of further job losses remains a primary concern for the local workforce [2].

“Cerro Matoso said these restrictions could lead to daily financial losses of $3 billion.”

This dispute underscores the precarious nature of energy dependencies in the mining sector. Because nickel is a critical component for stainless steel and electric vehicle batteries, prolonged production cuts at Cerro Matoso could ripple through the global supply chain while destabilizing the regional economy of Córdoba.