Glencore Abandons New York Relocation Plans, Strengthening London Presence

Glencore Plc has abandoned its plans to shift its primary listing from London as it aims to enhance a share price that has been adversely impacted by declining coal prices and reduced production.

Earlier this year, Glencore indicated it was evaluating the possibility of relocating its primary listing, but Chief Executive Officer Gary Nagle stated on Wednesday that the company would likely not have qualified for the S&P 500 had it moved to New York. Such a shift would have been detrimental to London, which has seen a 25% decrease in its listed companies over the past decade.

Similar to many of its mining counterparts, Glencore has grown increasingly dissatisfied with its valuation and has explored options like relocating its listing to improve its prospects. The company’s heavy reliance on coal—now diminished in value—alongside decreasing copper production and issues in metal processing and refining, has led to an approximately 18% decline in its share price this year.

The firm reported core earnings of $5.4 billion, a 14% drop from the previous year, falling short of the average analyst forecast of $5.9 billion. Consequently, Glencore shares fell as much as 4.7% in London.

Profits from both its coal and metals mining sectors have decreased compared to the prior year, while earnings from energy trading nearly halved.

Glencore has reported four straight six-month net losses. During the last period, it recorded a $859 million impairment on its Cerrejon coal mine in Colombia after reducing production there earlier this year to stabilize falling coal prices.

As the industry grapples with stagnant prices for key revenue sources, Glencore marks the latest large miner reporting reduced profits amid uncertainties stemming from President Donald Trump’s trade war that threaten demand.

The company has already announced plans to cut costs by $1 billion, revised its long-term trading profit targets upward, and revealed a share buyback plan.

On Wednesday, Glencore elaborated on its cost-cutting strategies, stating that half of the anticipated $1 billion in savings should be realized by the end of this year, with approximately three-quarters of reductions stemming from its industrial assets.

Glencore has joined other major firms in contemplating a departure from London to tap into deeper capital markets, higher evaluations, and a stronger appetite for fossil fuels in the US. While oil giant Shell Plc has previously considered a move to the US, BHP Group has opted to eliminate its dual listing to concentrate on Australia.

Nonetheless, Glencore stated on Wednesday that such a transition would not be “value accretive” and, while it continues to monitor the situation, deemed this not to be the appropriate time.

“It’s unlikely we would get into the S&P 500,” CEO Nagle mentioned to reporters. “It’s quite a complicated exchange. There’s no guarantee you get into it.”

This decision offers a temporary advantage for London. The UK market has been contracting in recent years, with a heavy flow of deal-related delistings and a slow rate of initial public offerings leading to a reduced number of stocks.

Moreover, over $100 billion in London-listed companies have either announced or executed plans to transition their listings to New York in recent years, according to Bloomberg calculations. Inclusion in indices can also entice companies, given the substantial amounts of capital seeking to track such benchmarks; however, Glencore indicated that this did not make the transition worthwhile.

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