South32 to return additional $500m to shareholders

Diversified mining company South32 on Monday announced that it intends to return an additional $500-million to shareholders, equating to 4.5% of the group’s current market capitalisation.

The Sydney-, London- and Johannesburg-listed company said in a media release that this dividend-complementing capital management programme will initially take the form of an on-market share buy-back in Australia.

South32 chairperson David Crawford said the combination of the company's operating leverage, strong balance sheet and simple capital management framework is designed to maximise returns and reward shareholders as financial performance improves.

The announcement demonstrates the company's approach to capital management and confidence in its cash generating capacity.

South32 CEO Graham Kerr noted that the company's net cash balance continues to build providing scope to invest in existing operations, pursue value accretive opportunities and return excess capital to shareholders.

The $500-million capital management programme increases shareholder returns and follows the recent announcement of the $192-million interim dividend.

The timing and number of shares purchased under the on-market share buy-back will be contingent on the prevailing share price and market conditions.

The on-market share buy-back is not subject to shareholder approval and will be funded from existing cash reserves.

The $500-million capital management programme is expected to be completed over a 12 month period and all alternatives will continue to be assessed to ensure this capital is returned in an efficient manner, the company said in a release to Creamer Media's Mining Weekly Online.

The globally diversified mining and metals company, with operations in Australia, Southern Africa and South America, has a strategy of maximising the potential of its assets and shareholder returns by optimising its existing operations, unlocking their potential and identifying new opportunities to compete for capital.