Glencore plans spin-off of mining royalties business – by Neil Hume (Financial Times – July 17, 2017)

Glencore is preparing to spin-off its portfolio of mining royalties into a new company later this year in an attempt to attract outside investors with an eye on an eventual stock market listing, according to people with knowledge of the discussions.

Glencore plans to seed the new company with royalty agreements worth in excess of $300m, while looking to attract a strategic partner to fund further deals. The mining and trading house wants to provide more financing to junior miners in return for a slice of their revenue and exclusive marketing deals.

The plan is the latest sign that billionaire Ivan Glasenberg, chief executive of the Swiss-based company, is pursuing growth after two years in which the commodity downturn forced it to focus on paying down debts and repairing its balance sheet.

Glencore is keen to recycle the blueprint that it used to raise cash from its agriculture business while creating a standalone company, Glencore Agriculture, through a $3bn deal with two Canadian pensions funds.

In order to finance new royalty agreements, Glencore would sell a stake in the new vehicle, focused on base metals, to a strategic investor, possibly a pension fund or sovereign wealth fund.

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