ASX mining share South32 Ltd (ASX: S32) is up 0.3% to $3.20 on Tuesday, while the S&P/ASX 200 Index (ASX: XJO) is up 0.14%.
South32 shares have had a bit of a run lately, rising 11.5% over the past six months.
Two experts say South32 is a buy amid an uptick in commodity prices for many of the metals and industrial materials it digs up.
Let's consider their arguments.
Experts give buy ratings to South32 shares
South32 mines nine commodities from its mining operations in six countries.
These commodities include silver, which has outperformed every other metal, except platinum, with a 75% price rise over the year to date.
South32 also mines copper, with the red metal's price up 27% this year, and aluminium, up 13% year-to-date.
The miner also produces lead, zinc, manganese, nickel, alumina, and bauxite.
On The Bull this week, Dylan Evans from Catapult Wealth put a buy rating on the ASX mining share.
Evans said:
The company's earnings are volatile, but the commodity mix provides diversification across price cycles.
S32's long life mine assets are high quality and low on the cost curve.
Overall, we're attracted to the company's commodity mix during the energy transition and electrification.
S32 holds a net cash position created by the sale of its coal division in 2024.
Analyst cites 'meaningful exposure to record silver prices'
Toby Grimm from Baker Young also has a buy rating on South32 shares.
He notes the diversified miner's underperformance against its peers in the materials sector over the past 12 months.
He commented:
Having underperformed the ASX 200 materials sector by almost 20 per cent over the past year, South32 looks relatively attractive, particularly given changes within the company's strategic focus and project portfolio.
Grimm said South32's diversified portfolio has a better mix today.
The exit of legacy Illawarra coal assets has funded the repayment of debt amid investment in far more appealing projects, such as the Sierra Gorda copper mine in Chile and the Hermosa project suite of zinc, lead, battery grade manganese and copper in the US state of Arizona.
Meanwhile, the Cannington mine offers meaningful exposure to record silver prices.
Returns from its core alumina and aluminium business appear set to improve on the back of higher metal prices.
ASX mining share snapshot
The South32 share price is down 13% over the past 12 months, but up 45% over the past five years.
By comparison, the S&P/ASX 200 Index (ASX: XJO) is up 7% over the past 12 months and up 38% over five years.
