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Do South32 shares have exposure to ‘green metals’?

South32 is a leading ASX miner. But how green is its portfolio?
The post Do South32 shares have exposure to ‘green metals’? appeared first on The Motley Fool Australia. –

South32 Ltd (ASX: S32) is one of the most diversified mining shares on the S&P/ASX 200 Index (ASX: XJO). Most miners tend to focus on one or two commodities. Take Fortescue Metals Group Limited (ASX: FMG). Despite its recent talk of expanding into hydrogen, Fortescue essentially remains a pure-play iron ore company today.

Fortescue’s fellow blue-chip miners in Rio Tinto Limited (ASX: RIO) and BHP Group Ltd (ASX: BHP) are more diversified. But iron ore remains the most important commodity for these companies as well. Especially considering BHP has just finalised the sale of its petroleum assets to Woodside Energy Group Ltd (ASX: WDS).

But South32 is a different beast. It was spun out of BHP back in 2015. This was done to ensure BHP could streamline into its four most important commodities at the time – iron ore, oil, copper, and coal. Everything else that BHP owned got bundled into South32 and demerged.

So what does the South32 commodities portfolio look like today? And more importantly, do South32 shares give investors exposure to green metals?

Well, that’s a good question. And it largely rides on what you might define as a ‘green metal’. Obvious candidates like lithium can be ruled out. South32 is not a lithium miner and has no exposure to this quintessential green metal. But it does have some exposure to some other future-facing metals.

Is South32 an ASX green metals share?

Let’s start with the main ones. South32 has major operations in aluminium. It produces aluminium, as well as alumina and the ore bauxite, through its facilities in Africa. However, while aluminium is an important metal in our economy, it can’t really be described as a green metal. South32’s metallurgical coal operations are also a non-starter when it comes to green metals.

South32 also produces lead, manganese, and zinc. Again, these are essential base metals. But not what a typical investor might get too excited about when it comes to environmental impacts.

But we get a little warmer when examining South32’s silver operations. The company owns the Cannington mine in North Queensland, which is a world-leading source of silver. While silver’s applications remain tilted towards jewellery and electronics, silver is also a key ingredient in making solar panels.

But perhaps South32’s ‘greenest’ commodities come in the form of copper and nickel. These two metals have been used for thousands of years, including in countless applications today. However, both nickel and copper are essential ingredients in electric motors and batteries – the kind you will find in the next generation of electric cars and vehicles. These we can call ‘green metals’ for most intents and purposes.

So, all in all, South32 shares provide an investor with exposure to a wide range of minerals and metals. Some of these can be considered green, others less so.

At the current South32 share price, this ASX 200 miner has a market capitalisation of $21.94 billion, with a dividend yield of 3.53%.

The post Do South32 shares have exposure to ‘green metals’? appeared first on The Motley Fool Australia.

Should you invest $1,000 in South32 right now?

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More reading

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Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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