While the S&P/ASX 200 Index (ASX: XJO) is surging ahead, the South32 Ltd (ASX: S32) share price is backtracking today.
The company's shares are in decline following a company update regarding the acquisition of additional shareholding in Mozal Aluminium.
At the time of writing, the mining outfit's shares are down 3.68% to $4.97.
South32 reports of delay on completed transaction
Investors are offloading South32 shares as the company provided a disappointing notice to the ASX this morning.
According to its release, South32 advised that there has been a delay to the expected closing date of the acquisition of an additional shareholding and related rights in Mozal Aluminium from MCA Metals Holding GmbH (Mitsubishi).
Last September, South32 exercised its pre-emptive rights to acquire up to an additional 25% shareholding in Mozal Aluminium, an aluminium smelter located near Maputo in Mozambique.
The US$250 million purchase price to acquire the interest would give South32 a 72.1% stake in the smelter.
Increasing its shareholding would essentially lift the company's annualised equity share of aluminium production by 15% to 1,138kt.
Previously, South32 had anticipated that the takeover would be finalised sometime in the current March quarter.
However, South32 noted that should the remaining conditions, including approval from the competition regulatory authority in Mozambique be satisfied, the acquisition is now expected to complete mid-2022.
About Mozal Aluminium
The operation is currently jointly owned by South32 (47.1%), Mitsubishi (25%), the IDC (24%) and the Government of the Republic of Mozambique (3.9% through preference shares).
Production guidance for the smelter is 273kt (47.1% basis) in FY22 and FY23.
Energy efficiency technology is currently being rolled out in the smelter's pot relining program. This is expected to deliver around a 5% increase, or 10ktpa to 277ktpa in annual production by FY24.
South32 share price snapshot
Regardless of today's decline, it has been a strong 12 months for South32 shares, climbing more than 77%.
In 2022 alone, its share price is up almost 24%, reflecting positive investor sentiment in the company.
South has a price-to-earnings (P/E) ratio of 20.95 and commands a market capitalisation of roughly $23 billion.
