JOHANNESBURG (miningweekly.com) – South Africans have taken the opportunity to snap up the shares of global diversified major GlencoreXstrata plc, following its debut on the main board of the Johannesburg Stock Exchange (JSE).
On Wednesday, nearly 52-million shares changed hands in more than 8 000 transactions as the R732-billion-valued global diversified natural resources major took up position as the JSE’s third-largest share, closing on R53.87 a share, and on Thursday another six million shares sold in the same price range.
The company anticipates South African investment in the shares making up more than 5% of the total share register.
GlencoreXstrata top brass impressed as they fielded journalists questions with balance and sharp business logic at a media conference to mark the listing, which Investec Securities described as a “sensible move”, Liberum Capital said was presenting “short-term squeezes on demand” for the share, and Werksmans Attoryneys said signalled confidence in the attractiveness of South Africa as an institutional investor base.
The South African debut augments GlencoreXstrata’s main London listing and secondary Hong Kong listing.
Investec noted that it offered South African investors a globally diversified resources opportunity with limited iron-ore exposure.
It would also allow the integrated producer and marketer of commodities, with worldwide activities in the marketing of metals and minerals, energy products and agricultural products the chance of taking up the local transactions opportunities that may arise.
GlencoreXstrata’s diversified operations are on 150 mining and metallurgical sites, offshore oil production assets, farms and agricultural facilities.
“We operate in 17 African countries and we must be one of the biggest mining companies investing in Africa,” South African-born GlencoreXstrata CEO Ivan Glasenberg told journalists.
Already South Africa’s biggest exporter of coal and ferrochrome, the company also has oil assets in Equatorial Guinea, Cameroon and Chad; copper in Zambia and the Democratic Republic of Congo; and zinc in Burkino Faso and Namibia.
Its integration facilitates the capture of value at every stage of the supply chain.
Glasenberg had high praise for South African investors, which, he said, matched the world’s best in their understanding of mining and he reiterated his comment of the global mining industry being in a state of overproduction, which had led to lowering commodity prices and underperforming equities.
“Mining companies love building new operations and we’ve overbuilt and created the oversupply,” he said.
The JSE expressed confidence that the listing would enhance GlencoreXstrata’s growth prospects and profile on the continent.
“The listing reflects well on South African financial markets and sends a positive message to potential issuers both local and international,” JSE CEO Nicky Newton-King said.
The listing follows requests by prospective investors at the Mining Indaba in February, who complained that there were insufficient mining investment options on the JSE with only two of the majors listed, both of which are heavily iron-ore exposed.
The listing provides choice and differentiation of copper, zinc and trading.