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Glencore JSE:GLN] will increase its share buyback program by as much as $1bn, adding to a growing number of moves by the world’s biggest miners this year to return more money to investors.
The announcement comes less than a week after the No. 2 miner, the Rio Tinto Group, announced a $3.2bn share buyback following an asset-sale spree. BHP Billiton [JSE:BIL] in August paid out a record dividend and pledged to hand shareholders most of the $11bn reaped from selling its US shale assets.
Glencore chief executive officer Ivan Glasenberg said in August that the world’s biggest commodity trader was focusing on cutting debt and returning money to shareholders. The serial dealmaker noted there was little of interest for the Swiss miner and trader on the acquisition front.
Glencore announced its original $1bn share buyback in July, after the company’s shares came under pressure when it was hit by a US Department of Justice probe. As of Monday, it had repurchased $939m shares. The buyback program will be extended to February 20, the company said in a statement on Tuesday.
The US probe extended a tough year for Glencore, mostly due to challenges linked to its business in the Democratic Republic of Congo, where it operates giant copper and cobalt mines.
Even after the initial buyback and a record-first half profit, Glencore’s shares have underperformed rivals this year. The stock has dropped 15% in London, compared with a 9.8% gain by BHP and Rio’s 0.8% decline. Anglo American [JSE:AGL] has climbed 12%.
Glencore's shares were trading at R63.90 by at 11.02 on the JSE, up 1.93%.
