Glencore sees electrification trend driving strong uptake for Australia listing

By Melanie Burton

MELBOURNE, Oct 9 (Reuters) - Glencore expects strong demand from investors seeking exposure to trend toward electrification when it lists in Australia next week, CEO Gary Nagle said on Friday, adding that a deeper local presence may yield business opportunities although it has no set buyout list.

The London-listed miner and trader has seen "very strong" interest from potential investors as well as existing ones limited by overseas mandate restrictions, Nagle told reporters ahead of its October 14 secondary listing on the Australian Securities Exchange.

Nagle has said he believes the $88 billion company can achieve inclusion in Australia's benchmark S&P/ASX 200 index within 12 months, but analysts see momentum behind the stock potentially propelling it into the top indexes in half that time.

Glencore's exposure to copper, a key material in the shift to electrification, makes it particularly attractive to investors. Analysts estimate that copper could account for 50% of Glencore's earnings in 2030 if its assets are developed on time, up from around 30% currently.

It is also among the world's top thermal coal producers, which in previous years may have hindered uptake due to mandate restrictions, but Nagle said investors' views have changed.

"The idea that thermal coal is going to disappear overnight seems to be a fallacy and everyone seems to recognise that," Nagle said, adding that recent energy crises have highlighted the importance of diverse energy supply.

"The world is energy short: it needs power, it needs electricity and it needs to be able to conduct that electricity," he said.

"So copper is good, and all sources of electricity production are good, including thermal coal."

Glencore also offers Australian investors commodity trading exposure, in becoming only ASX-listed company that has a metals and energy trading business, which is another draw, Nagle said.

That business has helped Glencore blow past profit expectations. It said last week it expects its 2026 marketing-adjusted operating profit to exceed $5 billion, well above its earlier long-term guidance range of $2.3 billion to $3.5 billion. The company's earnings from commodity trading have leaped as conflict in the Middle East creates constraints across global energy markets.

As a way to mitigate rising geopolitical risks, commodity trading was one of the appeals of Glencore's business for Rio Tinto CEO Simon Trott, when the companies discussed a potential $240 billion tie-up earlier this year, which Rio Tinto ultimately rebuffed.

Analysts and investors speculated that Glencore's decision to list in Australia could acclimatise investors who had not seen value in a deal for another approach.

"The decision to list here had nothing to do with any sort of M&A activity or ideas that we have around deals," Nagle said. "Of course, if having a listed security here provides any additional optionality, it’s certainly of benefit."

(Reporting by Melanie Burton; Editing by Kevin Buckland)