The South32 Ltd (ASX: S32) share price leaped 7% on Thursday, to make it one of the ASX’s best-performers.
South32 is the mining and minerals heavyweight that was spun out of the even larger resource company BHP Billiton Limited
(ASX: BHP).
What’s Going On?
Nothing material was reported by South32 on Thursday.
However, South32 was among a group of global mining companies that reacted positively following the news that the world’s largest alumina refinery, Alunorte, would cease production indefinitely.
The closure saw the price of aluminum rise more than $US10.
Why Did It Close?
The Alunorte refinery in Brazil is owned by Norway’s Norsk Hydro.
Due to an environmental dispute, the refinery had been running at 50% capacity. Brazilian regulators were concerned the plant was allowing potentially harmful water to run into nearby streams during heavy rain.
According to the Financial Times, Norsk Hydro said the plant has gone from a part-time shut down to “100 per cent of its operations”.
Alumina is the key resource to make aluminum, the metal which makes things like fizzy drink cans and car bodies light.
For South32, Rio Tinto Limited (ASX: RIO) and Alumina Limited (ASX: AWC) means less supply in the market. Meaning, higher prices for their products.
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