Miningweb - Javier Blas: Glencore’s copper promises test investor trust

Key topics:Glencore asks investors to trust ambitious copper production plans.Company repeatedly missed targets, raising shareholder skepticism.$23.4bn copper expansion aims to boost growth, M&A appeal..Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here.Support South Africa’s bastion of independent journalism, offering balanced insights on investments, business, and the political economy, by joining BizNews Premium. Register here.If you prefer WhatsApp for updates, sign up to the BizNews channel here..By Javier Blas.The ranks, past and present, of Glencore Plc are full of billionaires and multimillionaires. They clearly know how to make money for themselves. Problem is, they haven’t made so much for their institutional shareholders.Since its initial public offering nearly 15 years ago, the commodity trader and miner has seen its shares drop more than 25%. Not a problem for its executives, who sold at the IPO price, but quite an issue for everyone else. Even if including reinvested dividends, Glencore has served up annual returns of slightly less than 1% since its May 2011 listing.Understandably, institutional investors aren’t happy. Behind closed doors many have been voicing frustration for months, complaining about the company’s perennial tendency to overpromise on output targets, and then underdeliver.Sensing trouble, Glencore tried on Wednesday to reset relations via a refreshed strategy, including a 119-page slide deck. Read it, and it boils down to a simple message: This time is different — the production boom is coming. “We’ve changed,” Chief Executive Officer Gary Nagle told shareholders. “What we present today is what will be delivered,” he said..Acknowledging a problem is the first step to resolving it, so Nagle’s mea culpa is positive — even if he sounded like he was voicing it from the dentist’s chair. “We’ve had criticism on our ability to deliver,” he stated. He could have just said, “We’ve failed to deliver.” But let’s not get distracted by words. It was an apology, and one doesn’t get that many from Glencore.The promises are all about copper, the key metal for the energy transition. It’s also the metal where Glencore has most often failed to hit its production target. Now, it hopes to produce 1.6 million metric tons of copper annually by 2035, up from less than 900,000 tons this year. Sadly, the first step in this 10-year plan is down. So much for this time is different. The company cut its guidance for 2026 to 840,000 tons, down from 930,000 tons only a few months ago. It also cut guidance for zinc and other commodities.The positive is that Glencore does indeed own untapped mineral deposits to back its output ambitions. The question is whether it can unlock them on time and on budget. Historically, it has always preferred to buy mines rather than build them from scratch. “Today is different,” Nagle said. “Today we’re going to build the copper mines.”This won’t be cheap. Glencore previously told investors it planned to spend about $6.8 billion per year on its industrial assets from 2025 to 2027. Now it says that would rise to about $7.5 billion in 2026 and $8.2 billion in 2027 if the copper projects go ahead. That’s quite a change. The cost of delivering all the copper projects over the next 10 years is a staggering $23.4 billion.Still, with the commodity’s price at a record high above $11,500 a ton, in part thanks to companies like Glencore missing their short-term production targets, the expansion should provide good returns. As long as the red metal’s value remains high, the company says its copper business can self-fund the new mines and infrastructure. The plans have an additional benefit: They cement Glencore’s position as a potential M&A target.The copper expansion was well received by the stock market. Glencore shares rose more than 6% on Wednesday. Still, they’re roughly flat compared to a year ago. Meanwhile, copper prices are more than 25% higher than in late 2024. Over the last three years, Glencore shares have fallen 32%, as copper rose 36%.With those performance indicators in the background, Glencore largely ducked the most critical question during its strategy update, on dividends and buybacks. The company was largely mum about both, beyond a vague promise of “a constant focus on value creation for shareholders.” In more than 100 pages of slides, it mentioned the word “dividend” once, in relation to a tax and investment deal with Argentina. Little was said about divestments or possibly returning money from any asset sales to investors.If Glencore wants to win shareholders around, it needs more than slides with promises 10 years over the horizon. It needs to deliver this quarter, next year and in 2027. Only then will faith return. For now, it’s asking for a lot of blind trust, particularly when looking at its stock-market history. In the more than 3,600 trading days since it went public, Glencore has closed above its original sale price 58 times. Change that, and this time truly will be different..© 2025 Bloomberg L.P.

Miningweb - Javier Blas: Glencore’s copper promises test investor trust

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