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Miner South32 files request for arbitration in Colombia royalty dispute

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BOGOTA, March 31 (Reuters) - Mining company South32 has filed a request for arbitration at the World Bank over a dispute with Colombia concerning royalty payments from its majority-owned Cerro Matoso ferronickel mine, the company confirmed on Tuesday.

In February the Andean country's comptroller opened an investigation into alleged unpaid royalties of 619 billion pesos ($152.3 million) from iron and nickel production at Cerro Matoso between 1982 and 2012. Cerro Matoso, one of the largest open-pit ferro-nickel mines in the world, is located in a rural part of Cordoba province, in the north of Colombia. During the 2019 financial year Cerro Matoso produced 41,100 tonnes of nickel.

South32, which was spun off from BHP Group , is primarily listed in Australia.

The request for arbitration, filed with the World Bank's International Center for Settlement of Investment Disputes in accordance with the UK-Colombia bilateral investment treaty, was submitted by South32's UK unit on March 27.

<p>The arbitration request follows a number of measures taken by Colombia, which include &quot;seeking arbitrarily to re-calculate royalties owed and paid by its ... subsidiary Cerro Matoso SA,&quot; South32 said in an email to Reuters.

On the same day, the company withdrew its production guidance for Cerro Matoso following restrictions placed on the mining industry by Colombia&apos;s government to halt the spread of coronavirus. The South American country&apos;s comptroller did not immediately respond to a request for comment.

($1 = 4,064.81 pesos)</p><br>

(Reporting by Oliver Griffin; Editing by Steve Orlofsky)

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