Table of Contents
Key Points
- Glencore launches $1 billion stock buyback after securing $900 million cash and a 16.4% stake in Bunge from Viterra deal.
- Shares down 35% in 2024, underperforming BHP, Rio Tinto, and Anglo American amid weak metal demand and tariff concerns.
- $30 billion mining asset shift to Australia doubles subsidiary’s portfolio, strengthening Glencore’s global mining and energy strategy.
Glencore Plc, the Swiss commodity trading and mining giant led by South African executive Gary Nagle, will repurchase up to $1 billion worth of shares following the closure of its long-awaited Viterra sale to Bunge Ltd. The transaction, finalized on Wednesday, netted Glencore a 16.4 percent stake in Bunge and approximately $900 million in cash.
The company said the buyback is backed by surplus capital from the deal and will begin July 7, with completion expected before its full-year earnings release in February. This marks Glencore’s second top-up program this year, reinforcing its strategy of prioritizing shareholder returns despite ongoing market volatility.
Stock lags peers amid metal market weakness
Glencore stock has struggled in 2024, falling about 35 percent over the past year, underperforming mining rivals BHP Group, Rio Tinto, and Anglo American Plc. The drop was intensified by an April selloff tied to tariff tensions and declining metal demand.
Despite the slump, Glencore remains committed to capital returns. It announced a $1 billion buyback in February, even as earnings fell year-over-year—signaling confidence in its long-term fundamentals and strategic shift under Nagle’s leadership.
Major asset restructure boosts Australian arm
In a sweeping internal move, Glencore recently transferred more than $30 billion in global mining assets to its Australian subsidiary, Glencore Investment Pty Ltd. The assets include coal mines in Colombia, South Africa, and Canada, the Mara copper project in Argentina, and ferroalloy operations near Johannesburg—effectively doubling its Australian asset base to over $65 billion.
The restructuring follows Glencore’s decision to scrap a proposed coal spin-off and comes after its failed merger bid for Rio Tinto. The transfer positions Australia as a key strategic hub for the company’s long-term mining operations and regulatory alignment.
Cobalt disruption adds pressure
Founded in the 1970s as a trading house, Glencore has evolved into a global mining heavyweight with operations in 35 countries and a workforce of more than 150,000. Under Gary Nagle, Glencore has focused on growing its presence in energy and metals.
Last year, Glencore reported a 6 percent rise in revenue to $230.94 billion, supported by solid performance across its metals and marketing businesses. Meanwhile, Glencore declared force majeure on some cobalt shipments after the DR Congo halted exports to ease a global supply glut. The move underscores the growing complexities facing major miners navigating supply chains in critical minerals.