May 19, 2015
BHP spin-off South 32 had a cautious debut on the ASX yesterday. South 32, named after the line of latitude that runs through a number of its major assets in Australia and South Africa, will produce aluminium, silver, manganese, zinc, lead, nickel and coal. At the first day closing price of $2.05 the company has a market capitalisation of around $10 billion which places it as Australia’s third largest miner and within the top 50 Australian companies by capitalisation.
The new company represents around 10% of the value of BHP prior to the demerger. With tepid investor appetite for the mining sector currently holding sway, South 32 is likely to have a wide trading range before settling. BHP will now consist of its four key commodities of iron ore, coal, copper and petroleum.