News: S32 UPDATE 1-Australia's South32 to pay special dividend as profit jumps five-fold

(Adds details on dividend, CEO comment and background)

Aug 25 (Reuters) - Australian miner South32 Ltd (S32) said on Thursday it would pay a special dividend after annual profit jumped more than five-fold, thanks to higher realised prices for its key metals.

Western sanctions on Russia over the invasion of Ukraine have squeezed an already-tight supply of commodities such as coking coal, pushing up prices of the materials South32 mines.

That helped the company overcome the hit from a labour shortage and torrential rain in the key producing of New South Wales that had also impacted the operations of BHP Group (BHP) and Rio Tinto (RIO) .

"We are well positioned to navigate the current economic uncertainty ... while our ongoing focus on cost management and an expected 14% increase in production will mitigate industry-wide cost inflation," said Chief Executive Officer Graham Kerr.

The world's biggest producer of manganese said its underlying earnings for the year to June 30 rose to $2.60 billion, from $489 million a year ago. The figure was higher than the $2.55 billion expected by analysts, according to Refinitiv data.

South32, which was spun off from BHP in 2015, declared a special dividend of 3 cents per share and a final dividend of 14 cents, up from 3.5 cents a year earlier.