We add Glencore’s (ASX.GLC) secondary listing on the ASX to our coverage of its primary listing in London. It is a large thermal and metallurgical coal miner, with its marketing and copper divisions being other major businesses. We also update our coal miner fair values for our latest assumed coal prices.

Why it matters: Glencore’s ASX listing is partly driven by Australian investors generally having a more balanced view between resilient demand for both types of coal and ESG considerations, with ESG more emphasized in London. It could also make spinning off the coal business easier in the future.

  • An extensive copper business and growth pipeline is another attraction. We forecast the firm to produce about 830,000 metric tons of copper (its share) in 2026, rising to 960,000 in 2029, making it the fourth-largest copper miner by production behind Codelco, BHP, and Freeport.
  • Despite Glencore’s extensive Australian business led by coal, dividends will be unfranked. Its listing is good for the ASX, especially after the Firmus debacle. It adds to the ASX’s reputation as the premier exchange for mining companies, fronted by BHP, Rio Tinto, and gold miner Newmont.

The bottom line: In the near term, thermal coal prices are supported by rising demand due to gas-to-coal switching in Asia as the LNG supply is disrupted by the Iran war. We now assume thermal coal averages around USD 140 per metric ton from 2026 to 2029 based on the futures curve, up from about USD 125.

  • This drives the 8% rise in no-moat New Hope’s (ASX.NHC) fair value, to $6.70. Along with higher copper and zinc prices and foreign exchange, this also sees no-moat Glencore’s estimate up 7% to GBX 600. No-moat Whitehaven’s fair value is now $11, up 5%.
  • Based on the futures curve, we continue to assume metallurgical coal averages about USD 250 per metric ton from 2026 to 2029.

Key stats: Whitehaven (ASX.WHC) shares are about 30% undervalued, and New Hope trades 15% below fair value. Glencore is close to fairly valued.

We extend coverage to Glencore’s secondary listing on the ASX

Glencore ranks among the most diversified of the large global miners. Though as China is the key demand driver for much of what Glencore mines, diversification benefits are limited. However, its marketing business (roughly 30% of forecast midcycle group EBITDA from 2030) should be relatively resilient to changes in China’s rate of economic growth.

Mining generates roughly 70% of forecast midcycle group EBITDA from 2030. Glencore mines and produces a broad suite of commodities, led by coal. Other major commodity exposures are copper and zinc, while it also produces nickel, ferroalloys, and oil.

Glencore has been more reticent than peers when it comes to large, capital-intensive greenfield growth projects, but has been an active acquirer of assets, led by its acquisition of Xstrata in 2013. More recently, it bought 77% of Teck’s metallurgical coal business in July 2024. Even so, this has not made it immune to the impact of falling commodity prices and the capital intensive nature of the mining industry, with the company incurring significant write-downs over the past decade.

Glencore’s marketing business is less sensitive to the direction of commodity prices, as basic supply chain activities and arbitrage opportunities stemming from time, geography, and product differences account for a good deal of profits. On its own, we’d likely consider the business moatworthy. Deep pools of commodity suppliers and customer demand allow Glencore to efficiently match the two while taking a small but very profitable margin. That said, it’s not immune from cyclical swings. Marketing profits fell sharply in the financial crisis as commodity demand dropped. However, profits have subsequently recovered. Strong performance in 2020 and record marketing earnings in 2022 show Glencore’s ability to profit from volatile commodity prices.

Bulls Say

  • Glencore’s globe-spanning network of traders and logistics assets generates significant economies of scope.
  • The combination of its marketing business with significant mine production allows the group to extract greater value from its mining volumes.
  • Glencore is more diversified than many other large mining companies.

Bears Say

  • Glencore’s large thermal coal portfolio could be affected by demand falling faster than we expect due to attempts to reduce global carbon emissions.
  • Despite disclosures afforded by the initial public offering and subsequent filings, the marketing business remains relatively opaque to outsiders.
  • While marketing activities are less sensitive to commodity prices than Glencore’s industrial activities, the best-laid plans of traders can go awry when prices rise or fall faster than anticipated or historical correlations break down.

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