Glencore shrugs off coal concerns ahead of Australian listing

The mining and commodity powerhouse is betting that allowing large investors in Australia to buy depositary receipts for stock in London and South Africa will boost its share price and propel it into the ASX100 benchmark in the short term. Pension funds will be key to this strategy and have said they could increase shareholdings if Glencore listed in Sydney, CEO Gary Nagle said.

Many superannuation funds, which control some of the largest pools of money in Australia, introduced mandates limiting their ability to invest in companies with coal after pressure from their customers. Glencore’s main industrial activities unit got about 25% of its revenue from the fossil fuel last year, although the share of power-station fuel more than halved from a year earlier.

There “doesn’t seem to be the same concerns” that existed around investments in fossil fuels “from two or three years ago,” Nagle said on a call with media on Friday. Part of this was due to the global energy crisis caused by wars in Ukraine and the Middle East, which has led to an understanding that coal is an important part of the energy mix, he said.

Australian investors were well educated in mining, which was another key reason for the Sydney listing, Nagle said. Coal mined for power stations is already becoming a smaller part of the company’s business, and steelmaking coal remains vital for the market, he said.

AustralianSuper, the country’s biggest fund that manages more than $300-billion, already owns a significant stake in Glencore’s London-listed stock, according to Bloomberg Terminal.