South32 mulls writing down stake in South African manganese venture
Shares in BHP Billiton spin-off South32 (LON, ASX:S32) dropped 2.34% on Tuesday in Sydney after the new firm confirmed it is already planning to write down assets.
The Perth-based company plans to reduce the value of its 60% stake in its South African manganese assets, as it keeps furnaces shut due to a 20% fall in the price for the aluminum and steel making ingredient over the last year.
The new miner said in a statement that is reviewing “the fair value of its interest in the [Samancor Manganese] joint venture.”
It also announced it has delayed the restart of three of its four furnaces at the operation, noting that no permanent staff will be laid-off as a result of the temporary suspension.
South32 expects the move to have implications for the fair value of Samancor, which co-owns with Anglo American (LON:AAL), the world's largest manganese producer.
The company’s shares lost five cents, closing at A$2.09, compared to the A$2.13 it listed at in a $10.9 billion lukewarm market debut in May.