Nickel production at BHP Billiton’s (BHP.AX) (BLT.L) Cerro Matoso mine in Colombia fell 11.5 percent in the first quarter due to lower ore extraction and the repair of a transport system, the company said.

Colombia’s only nickel mine, Cerro Matoso -- with 21 million tonnes of measured reserves -- produces about 4 percent of the world’s nickel and 10 percent of global ferronickel, according to the Andean nation’s government."The March 2010 quarter was impacted by the upgrading of lower grade materials, lower recovery due to repair to the fines transport system and lower utilization," Illtud Harri, a media relations director at the firm, told Reuters on Friday.Cerro Matoso, which bills itself as the world’s second largest producer of ferronickel, produced 11,600 tonnes of nickel in January to March from 13,100 tonnes in the same period last year, Harri said in an email statement.Colombia’s energy ministry says it expects Cerro Matoso output at 50,200 tonnes this year, 51,400 tonnes in 2011 and 51,100 tonnes in 2012. The mine produced 51,800 tonnes last year, a 24 percent rise from 2008, according to company statements.Cerro Matoso has an estimated reserve life of 40 years based on current production levels. BHP says it has concession rights until 2012 with a possible 30-year extension.Located in northern Colombia, the mine has a lateritic nickel ore deposit and a low cost ferronickel smelter. The smelter and refinery are integrated with an open-cut mine.Nickel production at Cerro Matoso started in 1982 under the Colombian government, BHP and Hanna Mining. BHP gradually increased its stake to 99.9 percent from 53 percent.Colombia has six nickel deposits with measured reserves totaling 37.8 million tonnes and 46.48 million tonnes in indicated reserves, the government says. (Writing by Jack Kimball; editing by Jim Marshall)