Picture: ISTOCK
Picture: ISTOCK

South32 is appealing against a Colombian Constitutional Court ruling that it had to pay damages to communities negatively affected by waste emissions from its Cerro Matoso nickel operations in that country.

While the damages have yet to be quantified, South32 said it had accepted "notification" of the decision regarding "alleged health and environmental impacts on the community surrounding our Cerro Matoso operation" from the court.

"We are in the process of appealing the decision," said South32, an Australian company spun out of BHP.

Its share price fell more than 3% in Johannesburg and London on Wednesday.

The company said it was unable to "fully assess any potential financial or operational impacts, as the decision orders various compensatory and remedial activities which are not yet quantifiable".

The ruling had potentially serious consequences for South32, with Reuters reporting that according to a summary of the ruling Cerro Matoso had to reapply for its mining licence because the licensing in place did not reflect constitutional standards of environmental protection. The mine must "provide comprehensive and permanent attention to those people who suffer illnesses related to the exploitation of nickel and ferronickel" and pay damages to affected communities via a special fund, according to the court ruling quoted by Reuters.

South32 said the Constitutional Court’s decision did not have a "valid explanation".

The company disagreed with the judgment and "categorically rejects the conclusions reached by the court without any technical-scientific support that proves a relationship between people’s health and the operation of the company".

The company was also "assessing the scope of the decision and will make use of the different legal actions granted by Colombian legislation and the different international agreements signed, aiming for the protection of its rights and those of its shareholders, since the decision … disregards the fundamental principles of legitimate trust and legal security under which the company operates in the country", it said.

seccombea@bdfm.co.za

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