Colombia’s Top Nickel Mine Faces Closure as Gas Supplier Pulls Out
The Cerro Matoso Canacol gas crisis escalated this week as Canacol Energy filed in an Alberta court on April 28 to terminate its gas supply contracts with one of the world’s four largest nickel mines, putting at risk a Colombian operation that depends on Canacol for roughly 80% of its natural gas.
The mine’s blast furnaces, which run 24 hours and have no energy substitute, would face closure damages of 500 to 730 billion Colombian pesos (about $135 to $197 million) per furnace, while the action also threatens roughly half the gas supply to Colombia’s Caribbean coast.
Canacol produces 75 million cubic feet of gas daily, equivalent to 7.5% of national demand, and industry trade groups warn of household tariff hikes and risks to thousands of jobs across the region.
Key Points
— Canacol filed April 28 in Alberta court to terminate gas contracts in Colombia.
— Cerro Matoso depends on Canacol for 80% of its natural gas supply.
— Furnace damages of COP 500-730 billion ($135-197M) per furnace if production halts.
— 2,000 jobs and 50,000 community beneficiaries directly at risk.
— Canacol produces 75 million cubic feet daily, 7.5% of Colombia’s gas demand.
A Court Filing in Canada That Reaches Across Two Continents
The Rio Times, the Latin American financial news outlet, reports that Canacol Energy lodged the termination request before a Court in Alberta on April 28 as part of an organizational restructuring. Cerro Matoso has called the move improper and arbitrary, noting that its gas contract is governed by Colombian law rather than Canadian, and has asked the Superintendencia de Sociedades and the Superintendencia de Servicios Públicos Domiciliarios to enforce Colombian public order and the rights of employees, contractors and surrounding communities. Canacol shares are also being delisted from the Toronto Stock Exchange, deepening uncertainty around the gas supplier’s ability to maintain Colombian deliveries through the legal process.
Cerro Matoso has been owned by CoreX Holding since December 2025, when South32 divested to focus on copper and zinc assets elsewhere. CoreX operates in 10 sectors across 55 countries with more than 20,000 employees globally, and is also active in nickel projects in Macedonia, Côte d’Ivoire and Kosovo. The mine in southern Córdoba is the largest open-pit nickel operation in South America and the fourth largest globally.
The Numbers Behind the Closure Risk
A halt would trigger losses approaching COP 5.1 billion ($1.4 million) per day in revenue and COP 1 billion per day in lost royalties and taxes for the Colombian state. Cerro Matoso transferred COP 334.57 billion ($90 million) in 2025 royalties, allocated COP 10.6 billion to social programs, and produces 95 tons of ferronickel daily. Each idled furnace would face structural damage costs of COP 500 to 730 billion (about $135 to $197 million), with repair times exceeding 10 months according to the company.
A Caribbean Gas Supply Shock
The crisis extends well beyond the mine itself. Canacol produced roughly 70 GBTUd of gas in March 2026, supplying approximately 30% of the Caribbean coast’s gas and the equivalent of total consumption in Atlántico department, one of Colombia’s largest gas consumers. Industry groups Asoenergía and the Asociación Colombiana de Minería (ACM) have warned that an early contract termination would lift household and commercial gas tariffs, hit thermal power generation just as El Niño weather conditions are returning, and threaten thousands of jobs across the Caribbean coast.
Energy Minister Edwin Palma said publicly via X that the early termination of contracts cannot come at the expense of household budgets, urging that production be maintained and previously agreed transport and pricing terms protected. Palma indicated that the Superintendencia de Sociedades has the authority to validate or reject the Canadian court’s measure within Colombian jurisdiction. The petition has not yet been resolved by the Alberta court and must still pass review by the Colombian regulator before any termination can take effect on Cerro Matoso’s contract.
| Element | Detail |
|---|---|
| Court filing | Alberta, Canada, April 28 |
| Mine location | Montelíbano, Córdoba |
| Cerro Matoso owner | CoreX Holding (since Dec 2025) |
| Global ranking | 4th largest nickel mine |
| Daily ferronickel output | 95 tons |
| Gas dependency on Canacol | 80% of supply |
| Furnace damage if halted | COP 500-730B per furnace |
| Daily operational loss | COP 5.1 billion ($1.4M) |
| 2025 royalties paid | COP 334.57B ($90M) |
| Direct + contract jobs | 2,000+ workers |
| Community beneficiaries | 50,000 people / 25 communities |
| Canacol national demand share | 7.5% (75M cu ft daily) |
Connected Coverage
For broader context on Colombia’s energy and macro risks, see our coverage of CEPAL’s warning on Colombia’s fiscal deterioration and our analysis of Tecnoglass Q1 2026 results and tariff headwinds for Colombian exporters.
What Happens Next
- Coming weeks: Alberta court to rule on Canacol’s restructuring termination request.
- Parallel review: Superintendencia de Sociedades to validate or reject the Canadian measure under Colombian law.
- If terminated: Cerro Matoso would face 10+ months of repair costs and possible plant shutdown without alternative gas supply.
Frequently Asked Questions
Why is Cerro Matoso at risk of closure?
Cerro Matoso depends on Canacol Energy for roughly 80% of the natural gas needed to operate its 2 industrial blast furnaces, which run continuously and have no alternative energy source. On April 28, Canacol filed a request before a Court in Alberta, Canada, to terminate its gas supply contracts in Colombia as part of an organizational restructuring. Without sustained gas supply, the mine’s furnaces would shut down within hours, triggering structural damage estimated at COP 500 to 730 billion (about $135 to $197 million) per furnace and repair times exceeding 10 months.
What is Cerro Matoso’s economic footprint?
Cerro Matoso, located in Montelíbano, Córdoba, is the 4th largest nickel mine globally and the largest open-pit nickel operation in South America, producing 95 tons of ferronickel daily. The mine generates more than 2,000 direct and contractor jobs, and runs social programs benefiting 50,000 people across 25 communities. In 2025, the company contributed COP 334.57 billion (about $90 million) in royalties and taxes and allocated COP 10.6 billion to community programs covering land access, housing and education.
How would the contract termination affect Caribbean households?
Canacol produces roughly 75 million cubic feet of gas daily, equivalent to 7.5% of Colombia’s national demand and approximately 30% of Caribbean coast supply. Industry groups Asoenergía and the Asociación Colombiana de Minería have warned that early termination would push household and commercial gas tariffs higher, hit thermal power generation just as El Niño returns, and threaten thousands of jobs across northern Colombia. Energy Minister Edwin Palma said via X that the termination cannot come at consumers’ expense, requesting that production and previously agreed transport and pricing terms be protected.
Who owns Cerro Matoso now?
Since December 2025, Cerro Matoso has been owned by CoreX Holding, which acquired the asset from Australian mining group South32. South32 divested to focus on copper and zinc operations, and CoreX now operates the mine alongside other nickel projects in Macedonia, Côte d’Ivoire and Kosovo. CoreX is active in 10 sectors across 55 countries with more than 20,000 employees globally, and a portfolio spanning metals, mining, ports, terminals, green energy, shipping, infrastructure, oil and gas, and venture capital.
Updated: 2026-05-08T10:30:00Z by Rio Times Editorial Desk
Read More from The Rio Times