South32 Ltd., the diversified miner that’s cutting its global workforce on lower commodity prices, says its loss-making and strike-threatened Colombian nickel asset must deliver a plan to return to profits in the coming fiscal year to remain in operation.
Cerro Matoso is facing a deadline of July 2017 to demonstrate how it’ll begin to improve cash flow, Chief Executive Officer Graham Kerr said in an interview Thursday in Melbourne. The Perth-based producer is continuing talks with union members at the asset to avert a planned strike this month amid a dispute over a wage offer, he said.
“If they are not cash flow positive, if they can’t show me a plan to be cash flow positive, well we shouldn’t be running,” Kerr said. “We can’t cross-subsidize across the group, so if we can’t restructure if a way that makes sense, well then we won’t produce.”