Glencore urged to ditch City market by activist investor

MINING giant Glencore has been urged to abandon London as its primary market listing and ditch plans to spin off its profitable coal business.

An Australian hedge fund and shareholder has written to Glencore’s board with a list of demands aimed at boosting the share price which, it claimed, had lagged behind its rivals for more than a decade.

“London is no longer the home of mining,” wrote Ben Cleary, portfolio manager of Tribeca Global Natural Resources, in a letter reported by the

Financial Times.

“The LSE has a comparatively low appetite for mining investment and is no longer suitable as the company’s primary bourse” he added, calling on Glencore to move its listing to the Australian Securities Exchange.

Founded in 1974, and headquartered in Switzerland, Glencore is one of the world’s largest mining companies, producing and trading more than 60 commodities including iron, copper, zinc and other metals plus oil and coal.

However, investors such as Tribeca believe it is undervalued. “Glencore’s share price has underperformed its peers,” Mr Cleary’s letter reportedly said. It called on Glencore to move its listing to the Australian Securities Exchange, halt share buybacks and divest some of its stake in its trading division.

“Through these actions the company can increase shareholder return and close the valuation gap,” it said.

Coal mine ownership is a controversial issue for companies such as Glencore because of the link between coal-burning and CO2 emissions.

A market source said the idea of Glencore moving its primary listing to Sydney was “nonsensical”.

Others argue that the association with coal can undermine company share prices and investor pressure means many of Glencore’s peers have moved out of coal.

It previously argued that it would be the best custodian of its assets.

Glencore last year reached an agreement with Vancouver-based Teck Resources to buy its steelmaking coal business – and announced that once it completed the deal, it wanted to spin off the coal division, within two years.

Tribeca opposes any such spin-off.