Protest closes BHP’s Colombian mine

BHP Billiton’s (ASX: BHP) Cerro Matoso operation, located in Colombia, has been temporarily shut down as “displaced indigenous people seeking help” have protested outside the mine, blocking access to operations.

Cerro Matoso, which is 99.94% owned by BHP, is the world’s second largest ferronickel producer, which combines lateritic nickel ore deposit with a low cost ferronickel smelter. Ferronickel is most commonly used in the making of stainless steel.

According to local officials, the protests began around one week ago with the 6,000 participants seeking 8,000 hectares of land to relocate their community, as the mining operation displaced them and caused a number of health problems. The protest leader, Celedonio Padilla, said “People don’t have anywhere to live, and they also are getting cancer from the mining operation” as it is causing pollution.

The Cerro Matoso mine, which has an estimated reserve life of 28 years, has been steadily increasing production over the last few years. It produced 50.8kt of nickel in ferronickel form for FY2013, compared to 48.9kt in 2012.

BHP will be eager to continue on with its operations, given that the mine supplies roughly 4% of the world’s ferronickel.

Foolish takeaway

Whilst shares in BHP are sitting well below their all-time high, the miner does not represent as a good buy at today’s price. Although the miner is far more diversified than others in the industry, such as Rio Tinto (ASX: RIO) and Fortescue Metals Group (ASX: FMG), it would be wise to wait for a far more attractive entry point, given the volatility facing the mining sector.

Instead, are you interested in our #1 dividend-paying stock? Discover The Motley Fool’s favourite income idea for 2013-2014 in our brand-new, FREE research report, including a full investment analysis! Simply click here for your FREE copy of “The Motley Fool’s Top Dividend Stock for 2013-2014.”

More reading

Motley Fool contributor Ryan Newman does not own shares in any of the companies mentioned.

The 5 mining stocks we’re recommending in 2019…

For decades, Australian mining companies have minted money for individual investors like you and me. But if you believe the pundits and talking heads on TV, those days are long gone. Finito! Behind us forever…

We say nothing could be further from the truth. To earn the really massive returns, you’ve got to fish where others aren’t fishing—and the mining sector could be primed for a resurgence. That’s why top Motley Fool analysts just revealed their exciting new research on 5 ASX miners they believe could help you profit in 2019 and beyond…


The best way we see to play the global zinc shortage… Our #1 favourite large-cap miner (hint: it’s not BHP)… one early-stage gold miner we think could hit the motherlode… Plus two more surprising companies you probably haven’t heard of yet!

For free access to our brand-new research, simply click here or the link below. But be warned, this research is available free for a limited time only, and we reserve the right to withdraw it at any time.

Click here for your FREE report!