Rio Tinto’s chief executive has rejected calls from investors to drop the firm’s UK listing and focus on Australia.
The world’s second biggest miner holds a dual-listing on the London and Sydney Stock Exchanges, but has faced calls this year from UK-based activist investor Palliser Capital, to unify its corporate structure in Australia.
“It’s very clear, though, that it does not make economic sense to unify Rio Tinto,” boss Jakob Stausholm said in an interview with the Wall Street Journal. “Our conclusion is that it would destroy value.”
Palliser has argued the firm’s dual structure is a barrier to making acquisitions and had resulted in Rio Tinto trading at a $27bn discount to its Australian side.
But Stausholm poured cold water on the claims. “We can do a scrip deal, absolutely,” he said. “It’s a little bit more complex, but it’s entirely doable.”
The mining executive’s comments will come as a relief to London markets, which have grappled with a string of major company exits in recent years. Rio Tinto’s rival BHP left the the FTSE 100 in 2021, in favour of Australia.
The oil giant Shell, valued at £180bn, is publicly mooting quiting the London Stock Exchange in favour of New York, arguing it is “massively undervalued” by the UK market compared with US listed rivals.
Other big players including the Cambridge chip giant Arm and London-based commodities broker Marex have chosen to snub the UK capital and list across the pond.
Rio Tinto this morning posted a 14 per cent jump in half-year profit, bolstered by increased copper production. The mining group said on Wednesday it had made a net profit of $5.81bn in the six months through June.
Shares were up over two per cent by mid-morning.