Shares in BHP Billiton spin-off South32 (LSE: S32) have soared by over 10% today after it announced the results of the strategic review of its manganese operations in South Africa. Although it has decided to restart production of manganese following its suspension last year, it intends to do so on a smaller scale and this will mean significant job losses in the region.

The company believes that the changes being implemented will allow it to rebase its manganese ore production and benefit from reduced mine gate costs. When the changes are taken alongside the other initiatives being undertaken across South32’s portfolio of assets, they could lead to a strengthening of the company’s financial position as well as improved future cash generation.

Although South32 also announced a non-cash impairment charge of $1.7bn today, investors seem to be optimistic about its long-term prospects. Certainly, there’s scope for it to become more efficient and increasingly profitable, which is expected to lead to earnings per share of 3.3p in the current year. This puts South32 on a price-to-earnings (P/E) ratio of 16.1 which, given its long term potential, could prove to be a highly appealing valuation.

More appealing?

Despite this, the likes of Rio Tinto (LSE: RIO) and Centamin (LSE: CEY) may hold greater appeal. In the case of the latter, it trades on a lower rating than South32, with its shares having a P/E ratio of just 12.9. Furthermore, with production set to hit 500,000 ounces of gold within the next two years, it’s likely to deliver a significant rise in profitability over the medium term, which could positively impact on its share price.

In addition, Centamin’s focus on gold may also be a major ally for investors given the uncertain outlook for the world economy. That’s because during such periods it can be seen as a store of wealth. Also, its price has historically held up better than other commodities, thereby providing Centamin with a slightly better earnings outlook than South32.

Meanwhile, Rio Tinto continues to have a dominant position within the iron ore market, with its cost curve being among the lowest in the world. Although the price of iron ore could continue to come under pressure as Chinese demand falls, Rio Tinto’s position in the industry is likely to be strengthened relative to its rivals. This could lead to higher market share and greater profitability in future.

Furthermore, with Rio Tinto trading on a P/E ratio of 12.2, it also offers better value than South32 at the present time. So while South32 could prove to be an excellent long-term buy, Rio Tinto and Centamin seem to be preferable for investors who are unable to hold all three.

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Peter Stephens owns shares of BHP Billiton, Centamin, South32 and Rio Tinto. The Motley Fool UK has recommended Rio Tinto. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.