(Reuters) – Australian miner South32 Ltd reported a bigger-than-expected 25% drop in annual profit as the trade war between China and the United States hurt aluminum prices, sending its shares lower by as much as 5.8% on Thursday.
South32 also said it was in talks to sell its South Africa thermal coal business to Johannesburg-based Seriti Resources, the latest company to get out of energy coal at a time when investor pressure and climate change concerns are prompting businesses to limit their exposure to fossil fuels.
The miner’s fortunes have soured in tandem with a decline in aluminum prices, which have come under pressure this year due to a slowdown in China – the world’s biggest consumer of the metal – as the Sino-U.S. trade war has escalated.
Alcoa and Norsk Hydro ASA, two of the world’s biggest aluminum producers, warned last year that the trade war was clouding the outlook for the metal.
“It is a pretty tough mix of commodities of coal, manganese and aluminum,” said Damian Rooney, a director of equity sales at Argonaut, referring to the commodities that South32 sells. Price for all three of those metals are down.
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