Ann: Quarterly Report December 2016, page-22

I would be very surprised if they they will did a buyback, they considered it when the SP was about $1.40 (iirc), but decided against it, they would look very wasteful doing one at double the price. It looks to me that they are building a warchest and wont let go of cash easily.

I think there is a view that the iron ore prices have peaked as new supply is coming this year, margins are very high, production of steel is unlikely to increase and there isnt much domestic Chinese IO production left to cut.
If IO prices go down (due to extra supply), and demand for steel stays at similar levels (or only drops a small amount), then the demand for Manganese, Coking Coal and Nickel and Zinc doesnt necessarily change much, so IO prices drops might be isolated. Manganese might be the exception as there is might be extra supply coming online. But i haven't heard of anyone talking of Aluminium heading down.

I dont think we will see a commodities route across the board like we did a year ago, but we might see isolated falls of individual commodities. Much of the risk is political, Indonesia deciding to allow export of low quality nickel ore, Philippines shutting down nickel mines, Gold driven by political risks effects silver. China balancing pollution and growth.

I think this year diversification will make South32 look good. Others might get into some difficulty, but there has been a lot of focus on reducing debt across the board, so im not convinced there will be any forced selling of quality assets. South32 will have the cash, but its still going to be hard to find the right asset.

Early on when the SP was bottoming there was talk that they hoped to see a SP increase so they could use script to do deals, so now with a pretty good SP it wouldn't surprise me to see a merger, i.e. share swap rather than a buyout of another company.

I just have difficulty seeing many scenarios where they would let go of their cash, but it has to happen eventually.