Deutsche Bank, Germany’s largest lender, expects Glencore to move its primary listing to the New York Stock Exchange as talk of the group ditching its London listing heats up.
Glencore, which has a secondary listing in Johannesburg, has traded in London since 2011. The bank in a note said it has pencilled in a Glencore US listing in the medium term.
“We still believe a US listing is possible over the medium term and the recent Glen Rio [Glencore and Rio Tinto] merger newsflow suggests to us that management may still be open to separating the coal assets and potentially breaking up the business,” Deutsche Bank said.
News emerged earlier this year that Glencore and Rio Tinto were in talks about a potential mega-merger — 10 years after similar talks fell through.
Glencore CEO Gary Nagle would not comment on the speculation when the group released its results last week, though he did say the group was considering a listing that will boost its valuation.
“Ultimately, what we want to ensure is that our securities are traded on the right exchange where we can get the right and optimal valuation for our stock,” Nagle said. There have been questions raised previously around whether London is the appropriate exchange, he said.
“If there’s a better one, and those include the likes of the New York Stock Exchange, we have to consider that.”
The UK has traditionally been a sought-after listing for mining companies, with the bourse being home to Anglo American, Glencore and Rio Tinto.
However, New York has emerged as a strong bourse for mining companies looking for higher valuations and deeper liquidity the US offers.
The London Stock Exchange suffered a blow in 2022 when BHP relinquished its listing and moved it to its home country, Australia.
AngloGold Ashanti in 2023 moved its primary listing to the US in a move that the gold producer hopes will close the market valuation gap between itself and larger rivals in Northern America such as Newmont Corporation and Barrick Gold.
The relocation of AngloGold’s primary listing to New York from the JSE confirmed the long-held market speculation after the company sold its remaining Mponeng mine to Harmony Gold in 2020, ending an era with SA that dates back more than a century when it was part of the Anglo American stable.
AngloGold also moved its headquarters to the UK as part of the transition championed by CEO Alberto Calderon.
While Deutsche Bank is not ruling out Glencore trying to spin off its vast coal assets, the move has already been voted down by shareholders.
More than 90% of Glencore’s shareholders in August rejected the company’s plans to unbundle its coal and carbon steel business, essentially telling it to use windfalls from coal to fund its transition plans and return excess cash to shareholders.
Glencore in 2023 outlined plans to spin off its coal business, after acquiring Elk Valley Resources — the metallurgical coal business of Canadian company Teck — for $6.9bn.
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