BUZZ-Australia's South32 surges after tepid debut

** South32 Ltd's shares rise as much as 12.7 pct to A$2.31

** Mining company opened at A$2.13 on debut day on Monday, but closed lower at A$2.05

** RBC Capital Markets initiates coverage with "outperform" rating and target price of A$2.60

** Research firm forecasts flat production from FY14 to FY18

** South32's ROE of 1.45 is higher than sector average of -2.50

** Almost 50 mln shares change hands, making it second most traded stock on Australian stock exchange

** About 160.2 mln shares changed hands on Monday (Reuters Messaging: arnab.paul.thomsonreuters.com@reuters.net)