Rio Tinto May Delist From The UK

Mining giant Rio Tinto has called on shareholders to oppose proposals to abandon its London listing, as pressure mounts from UK hedge fund Palliser Capital to consolidate its dual-listed structure into a single Australian entity. The move would give Australian investors full tax benefits on dividends and enable share-based acquisitions, but would strip the FTSE 100 of one of its largest constituents.

Peter Cunningham, Rio’s chief financial officer, said ahead of the company’s annual general meeting in April: “Many shareholders see the dual-listed company as effective within our structure. The cost of unification and benefits of the current setup are well understood.”

The debate comes as Rio Tinto reports its weakest annual results in five years. Underlying earnings fell to \$10.87 billion in 2024 from \$11.76 billion the previous year, mainly due to a drop in iron ore prices caused by weak demand from China’s struggling property sector and high port inventories. The price of iron ore, a key component in steelmaking, fell 10% on average, driving a 19% drop in earnings for Rio’s iron ore division. However, its aluminium business saw a 61% increase in annual underlying earnings, while copper and aluminium growth provided some offset.

Calls to leave the London market have also come from Glencore, another FTSE 100 miner, which is considering a shift to New York or another exchange following pressure from Sydney-based Tribeca Investment Partners.

Rio Tinto, one of the world’s largest iron ore producers, generates most of its revenue from Australia’s Pilbara region. The company is shifting focus towards future-facing metals crucial for energy transition, such as lithium. In October, it acquired American lithium specialist Arcadium Lithium for \$6.7 billion. Cunningham said that while mergers and acquisitions remain on the table, the company is focused on integrating Arcadium Lithium.

It also emerged that Rio Tinto held preliminary merger talks with Glencore late last year regarding parts of their respective businesses. Although discussions did not progress, they highlight the shifting landscape of the global mining sector.

Despite its weaker earnings, Rio’s share price has shown resilience, with investors encouraged by the company’s strategic pivot towards sustainable metals. However, the outcome of the upcoming AGM could significantly shape its future presence in the UK market.