Glencore (LSE:GLEN) plans to launch a secondary listing on the Australian Securities Exchange (ASX) in the coming months as it looks to attract more investment from one of the world’s fastest-growing pension markets.
The move was confirmed during the mining giant’s earnings call this week, with Chief Executive Officer Gary Nagle quoted saying the company aims to secure inclusion in the ASX 200 within 12 months of listing.
“We believe that is fully achievable, and our ambition goes well beyond the ASX 200. We believe soon thereafter, we can, in fact, get ASX 100 inclusion, which requires approximately $5.5 billion on the Australian line,” Nagle told investors.
According to Nagle, an Australian listing would give Glencore access to new sources of capital, noting that many of the country’s largest pension funds are unable to increase their holdings without a local listing.
Australia’s superannuation sector manages about $4.4 trillion in assets, with Deloitte forecasting the pool will almost triple to $12.4 trillion by 2045.
The country’s largest super fund, AustralianSuper, previously said that an ASX listing would be positive for both the company and the local market.
Admission on the ASX could occur as soon as October, according to the company.
M&A and copper boosts
The proposed listing comes as the six-month standstill following Glencore’s merger discussions with Rio Tinto (ASX:RIO) comes to an end. A combination of the two would have created the world’s largest mining company, valued at more than US$200 billion ($285 billion).
In the earnings call, Nagle said investor interest in Glencore has strengthened since the companies walked away from the deal in February.
“There have been requests from many investors to meet with us after some of the discussions that had happened about Rio,” he noted, while also adding that an Australian listing would not affect any future transaction involving Rio.
According to Jefferies analysts, the move could also “make it easier for Glencore to pursue large mergers and acquisitions involving Australian-listed mining companies.”
Nagle said the listing would strengthen Glencore’s profile in one of its most important operating jurisdictions, where the group already has a significant presence through its coal business.
It could also provide additional capital to support the company’s copper growth strategy. Glencore is targeting annual copper production of 1.6 million tonnes by 2035, roughly double current levels.
In Australia, the company currently operates the Mount Isa copper smelter, the country’s only facility capable of processing concentrates from both domestic and regional mines.
Write to Jackson Chen at Mining.com.au
Image: Glencore
