LONDON’S centuries-old dominance as the world’s premier destination for mining finance is drawing to a close as investors increasingly favour Australia and Canada for backing resource ventures, said the UK’s Daily Telegraph.
“The days of mining being financed from London are over,” one veteran broker told the newspaper. “This is the market that built Rio Tinto, Anglo American and Consolidated Goldfields. But all that has passed.”
The numbers tell a sobering story. Britain hosted 134 mining companies with primary listings worth over $300bn in 2015, falling to 109 firms valued at $233bn by June this year. BHP’s departure in early 2022 dealt a significant blow.
Meanwhile, Australian listings climbed from 662 to 712, with market capitalisation surging from $233bn to $385bn. Toronto’s market value jumped from $132bn to $439bn despite fewer listings.
Capital raising has declined even more dramatically. Just 37 mining companies floated in London over the past decade compared to over 300 in Australia and 76 in Canada. Australian miners conducted nearly 4,900 follow-on raisings totalling $53bn versus London’s 886 raising merely $14bn.
Industry executives cited insufficient risk appetite and heightened environmental, social and governance concerns amongst British and European investors. “Mining got a bad rap, and continues to get a bad rap,” one said.
Australia benefits from mining comprising up to a quarter of the stock exchange, forcing even large pension funds to participate. Retail investors also readily back speculative ventures.
“Your mum-and-dad punters are happy to chuck in 10 grand on a chance you’re going to get some good intersects,” said a Perth-based miner.
However, not everyone shares this pessimism. Dan Coatsworth, head of markets at AJ Bell, insisted appetite remains, particularly for larger stocks, citing Greek miner Metlen’s summer listing in the FTSE 100. “The company was essentially saying it sees an attractive pool of investors, who understand the industry,” he said.
