South32 Ltd's stock fell sharply by 5.01% during intraday trading on Thursday, as investors reacted to news of U.S. government involvement in a key joint venture partner.
The decline follows reports that the Trump administration is taking a stake in Trilogy Metals, which partners with South32 in the Upper Kobuk Mineral Projects (UKMP) in Alaska. The White House will invest approximately $35.6 million for the development of critical mineral resources at the UKMP, raising concerns about potential dilution of South32's interests and increased government intervention in the mining project.
Market analysts suggest the U.S. government's direct investment in Trilogy Metals has created uncertainty about the future control and direction of the joint venture, leading to the sell-off in South32 shares.