Glencore hunts more deals after Rio Tinto talks collapse
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The news: Glencore CEO Gary Nagle said that leading miners need to pursue more deals to grow in order to remain “relevant”, despite the miner's recent failure to merge with Rio Tinto.
The context: In his first public comments since the talks collapsed, Nagle said: “As an industry we need to be more relevant. Relevance and size is important…All the companies are a little bit irrelevant.”
Nagle said that consolidation in the industry makes sense “for a number of reasons”, that Glencore’s investors are keen for the company to pursue such opportunities and that “Glencore will always look at deals that make sense for us and for our shareholders”.
He commented that it is much harder for the mining industry to maintain a strong voice in Washington as the market values of the world’s largest miners are being dwarfed by tech firms. “Being seen as a central player by this administration would be easier,” he said.
Nagle made the comments during a call to discuss the company’s preliminary FY25 results reported on Wednesday.
The numbers: Glencore reported core earnings of USD13.5 billion ($19.1 billion), a 6% decrease from the year prior as coal prices weighed on earnings.
The miner also announced a USD2 billion dividend.
What they said: On the results, Nagle said in a statement: “For the second consecutive year, we met our guidance for full year production volumes for our key commodities, reflecting the ongoing benefits of our recently optimised and simplified operating structures promoting greater accountability and delivery.”
“Glencore’s standalone investment case is strong…We have a well-diversified business across a range of commodities, supported by one of the best marketing franchises in the industry. We are uniquely positioned to support the energy needs of today whilst providing many of the transition-enabling commodities the world needs as demand changes.”
