Australia digs in as top destination for mining listings

By Melanie Burton and Divya Rajagopal

MELBOURNE (Reuters) - Australia's bourse is set for a record number of secondary listings this year from mine developers enticed by the country's pension wealth, regulation and a jurisdiction less exposed to U.S President Donald Trump's trade wars, industry sources said.  

The Australian Securities Exchange (ASX) is growing its market share in metals and mining partly at the expense of Toronto and London rivals, just as the sector needs to expand by $100 billion a year to produce the metals needed to reach net-zero emissions by 2050, industry figures show.

The strength in mining comes even as overall listings at the exchange have fallen over the last decade.

A successful listing by Canadian copper miner Capstone last year that allowed private equity to exit and Australian investors exposure to a new operating copper mine, with eventual index inclusion, ignited new interest, banking and lawyer sources said.     

"Definitely much more interest in Canadian-listed companies coming to the ASX," said Sherif Andrawes, head of global natural resources for consultancy BDO, who has worked on four recent listings. 

"The ASX ... is in a healthier state than the Canadian markets for exploration companies at the moment," he said. "There are more in the pipeline."   

One of the key attractions is Australia's large pool of pension wealth, the world's fourth largest with assets of A$4.1 trillion ($2.58 trillion), and funds' willingness to hold a significant proportion of their money in Australian-listed stocks.

That is attractive for even foreign domiciled miners looking to raise the billions needed to develop new projects. Australian pension funds allocate far more to domestic shares than their rivals, at around 23% according to JP Morgan estimates, compared to 4% each in Canada and the UK.

They are heading into a hungry market. Buyouts like BHP's acquisition of copper miner Oz Minerals in 2023 have winnowed the universe of mining stocks for managers with resources mandates. 

"M&A has created an opportunity for companies to fill the board," said Todd Warren, a portfolio manager at Tribeca Investment Partners in Sydney. 

Canadian developer Marimaca Copper is expected to launch a secondary listing on the ASX this month in the second of at least four in train for this year, according to filings and source estimates, as many as in 2021, the ASX's top year so far.

"We are at an important point in our development and are seeking to expand our pool of potential investors as we approach a financing decision to construct our flagship project in Chile, which we expect... in the first half of 2026," Marimaca head of corporate development Nico Cookson told Reuters.

LURE OF STABILITY

It's not just secondary listings. 

Australian investors' appetite for mining stocks played a role in pushing BHP to scrap its dual London listing in 2022, which injected A$96 billion into the ASX and cemented its spot as the top mining exchange.

LSEG declined to comment but pointed to data that showed it had higher mining and metals market capitalisation than the ASX. Thomson Reuters, the parent company of Reuters, holds a minority stake in LSEG, which is Reuters' largest news service client.

Top iron ore miner Rio Tinto is now under similar pressure. Meanwhile, mining entrepreneur Robert Friedland's African iron ore company Ivanhoe Atlantic plans to list on the Australian bourse, a spokesman told Reuters. 

Interest from Canadian resources companies to list is "the most engaged and active we have ever seen it," the ASX's head of listing James Posnett said.

"Anecdotally, volatility in the market (related to geopolitical risks) has prompted several companies to seek diversification of their share register outside of North America. Australia is seen as an economically stable jurisdiction with strong investor demand," he added.

The ASX declined to detail the value of expected listings this year.

The trend is not only one way. TSX said it encouraged dual listings and pointed out it had had seven Australian companies listing there compared to only two Canadian firms listing in Australia last year. That includes FireFly Metals which is developing a copper-gold project in Newfoundland. 

And it comes as the number of ASX listed companies overall has shrunk, by 4% in the 10 years through 2024, according to Australia's sharemarket regulator.   

"What is happening in mining is a really interesting counterpoint to the ‘shrinking ASX’ narrative" said Paul Schroder, a partner at law firm King&Wood Mallesons in Sydney.

($1 = 1.5888 Australian dollars)

(Reporting by Melanie Burton in Melbourne and Divya Rajagopal in Toronto; Additional reporting by Felix Njini in Johannesburg; Editing by Kate Mayberry)