Rio Tinto Faces Pressure to Ditch London Listing for Aussie Focus
A major investor, Palliser Capital, is calling on mining giant Rio Tinto to abandon its primary London listing and concentrate on its Australian roots. The UK-based hedge fund, which holds a sizable stake in the FTSE 100 company, argues that Rio Tinto’s “outdated” dual listing structure across London and Sydney financial markets hampers its potential.
Palliser, echoing the move by rival BHP in 2022, believes that consolidating operations under a single listing in Sydney would simplify things for investors while strengthening Rio Tinto’s connection to its Australian origins.
Investor Support Grows for Australian Focus
Blackwattle Investment Partners, another Australian investment firm, has publicly backed Palliser’s proposal. This growing chorus of support leverages concerns about a discernible trend of companies leaving the London stock market, choosing instead to list their shares overseas. Notable departures include travel company Tui and Paddy Power owner Flutter, adding fuel to the debate surrounding London’s future as a global financial hub.
Despite the proposed shift to Sydney as the primary listing, Rio Tinto shares would continue to trade in London, albeit as a secondary listing, ensuring accessibility for existing UK investors.
Expanding Copper Production and a Decade of Profitable Growth
The calls for change come as Rio Tinto outlined its long-term investment strategy, emphasizing its commitment to substantial copper production growth. During its Investor Day in London, Chief Executive Jakob Stausholm confidently proclaimed,
“We have all the building blocks we need to become a global leader in energy transition materials, and we have a clear plan for a decade of profitable growth.”
He further elaborated on the company’s ambitious plans, stating, “We are executing our strategy of delivering a stronger, more diversified, and growing business, underpinned by our belief in the demand for materials which are essential for the global energy transition.”
Rio Tinto projects a significant increase in copper production to 780,000-850,000 tonnes in 2025, a considerable jump from the 660,000-720,000 tons expected in 2023. This anticipated growth is primarily fueled by robust production at the Oyu Tolgoi operation in Mongolia. Looking further ahead, Rio Tinto aims to reach an impressive 1 million metric tons of annual copper production by 2030, solidifying its position as a key player in the global energy transition.
Stausholm underlined Rio Tinto’s commitment to a balanced approach:
“With improved performance we can afford both growth and our decarbonisation, and continue our dividend policy and practice while preserving a strong balance sheet.”
What are the arguments for and against Rio Tinto maintaining its dual listing structure?
## Rio Tinto’s Dual Listing: A Relic of the Past?
**Interviewer:** Welcome back to the show. Today, we’re diving into the heated debate surrounding Rio Tinto’s dual listing structure. With pressure mounting from major investors like Palliser Capital, could the mining giant be set for a major shake-up? Joining us today is Sarah Jones, a financial analyst specializing in the mining sector. Sarah, thank you for joining us.
**Sarah:** Happy to be here.
**Interviewer:** So Sarah, Rio Tinto has been operating under this dual listing structure in London and Sydney for quite some time now. Can you explain the premise behind it and why it’s facing criticism?
**Sarah:** Absolutely. Rio Tinto’s dual listed companies (DLC) structure, as explained on their website [[1](https://www.riotinto.com/en/invest/shareholder-information/dual-listed-companies-structure)], aims to create a situation where shareholders in both Rio Tinto plc and Rio Tinto Limited are treated as if they hold shares in a single entity. However, critics argue that this setup is outdated and unnecessarily complex.
**Interviewer:** Palliser Capital, a major stakeholder, is leading the charge for a London exit.
What are their main arguments?
**Sarah:**Palliser, echoing BHP’s decision in 2022, believes streamlining operations under a single listing in Sydney would benefit both investors and the company. They argue it simplifies things for shareholders and re-centers Rio Tinto’s identity around its Australian roots.
**Interviewer**: It’s interesting that Blackwattle Investment Partners has also voiced support for this move. Does this suggest a wider trend?
**Sarah:** Absolutely. The growing chorus in support of a Sydney-only listing reflects concerns about declining London stock market attractiveness. Global players like Tui and Flutter have opted to list their shares elsewhere, raising questions about London’s future as a global financial hub.
**Interviewer:** This presents a fascinating dilemma for Rio Tinto. What are some of the potential consequences of ditching the London listing?
**Sarah:** There could be both advantages and disadvantages. A single listing in Sydney might simplify operations and attract more Australian investors. Conversely, it could alienate some global investors accustomed to trading on the London Stock Exchange. Rio Tinto would need to carefully weigh the pros and cons before making any drastic changes.
**Interviewer:** It’s certainly a story to watch. Thank you for breaking down this complex situation for us, Sarah.
**Sarah:** My pleasure.
