Glencore taps Australia for A$4.4T copper push

Glencore (LON: GLEN) plans to seek a secondary listing in Australia to tap one of the world's fastest-growing pools of mining capital, support its copper growth strategy and strengthen its position for potential acquisitions.

The Swiss mining and commodities giant aims to join the Australian Securities Exchange (ASX) in October, giving it access to a deeper base of mining-focused investors and Australia's A$4.4 trillion ($3.1 trillion) pension market. 

Chief executive Gary Nagle said the company expects to qualify for inclusion in the benchmark ASX 200 index within 12 months, requiring about A$1.5 billion in Australian market capitalization, before eventually meeting the roughly A$5.5 billion threshold for the ASX 100. Glencore's shares rose 4.5% in London after the announcement.

"It is a deep pool of capital, with deep knowledge of the mining industry," Nagle said. "We have had a lot of inquiries from Australian funds."

M&A potential

The listing highlights growing pressure on London's position as a global mining finance centre while giving Glencore greater access to investors with strict domestic investment mandates. Australia's pension assets are forecast to almost triple to A$12.4 trillion by 2045, according to Deloitte, making the country one of the world's largest and fastest-growing sources of institutional capital. Nagle said existing Australian shareholders face limits on overseas investments, making a local listing an effective way to unlock additional capital.

The move also comes as the six-month standstill following Glencore's unsuccessful merger discussions with Rio Tinto (ASX, LON: RIO) expires. Jefferies analysts said an ASX listing could make it easier for Glencore to pursue large acquisitions involving Australian-listed companies, while RBC Capital Markets said the move may also raise the company's profile should merger talks with Rio ever resume. Nagle maintained the company's immediate priority remains organic growth in copper.

Australian investors broadly welcomed the proposal. Australia's largest pension fund, AustralianSuper, said in May that a Glencore listing would benefit both the exchange and the company. Solaris Investment Management chief investment officer Michael Bell told Reuters his firm would welcome another major mining company on the ASX.

Some fund managers, however, questioned whether Glencore could build sufficient trading liquidity without issuing new shares or pursuing a major transaction. Others pointed to the absence of Australian franking credits, the company's exposure to thermal coal and four workplace fatalities this year as potential obstacles to attracting local investors.

London loses miners

The announcement adds to concerns over London's ability to retain major mining companies. BHP moved its primary listing to Sydney in 2022, while Rio Tinto last year defeated an activist campaign seeking to simplify its dual-listed structure and reconsider its London listing. 

Glencore has spent years reviewing alternative listing venues, including New York, and previously explored spinning off its coal business before abandoning the plan.

Glencore also said it has stopped doing business with Singapore-based iron ore trader Radiant World after concerns over allegedly fraudulent shipping documents. Nagle said the company has taken provisions against existing contracts with Radiant but did not disclose the amount. Radiant has denied wrongdoing.

The company reported adjusted first-half earnings of $10.1 billion, up 86% from a year earlier and the second-highest result in its history, supported by elevated commodity prices and strong trading profits from volatile energy markets.