UBS backs Australian miner South32's Colombia exit on shedding 'challenging' asset

** UBS views South32's S32 $100 million sale of its troubled Cerro Matoso ferronickel mine in northern Colombia as a strategic positive, calling it an exit from a "challenging business in a challenging jurisdiction"

** Maintains "neutral" rating with A$3.20 price target unchanged, but sees divestment as smart portfolio simplification ahead of potential operational improvements

** UBS says the deal streamlines the miner's focus to three core segments: aluminium/alumina, copper/zinc/lead/silver, and manganese

** S32 says it will incur an impairment charge of $130 million related to the sale

** Brokerage says Colombian ferronickel operation has been a persistent headache for S32, with regulatory challenges and operational complexities weighing

** Eight of 16 analysts rate the stock "buy" or higher and 8 "hold"; median PT is A$3.50 – data compiled by LSEG

** Stock down 8.82% this year, as of last close