Activist investor Palliser Capital is intensifying its campaign to push Rio Tinto (ASX, LON: RIO) into conducting an “independent, comprehensive, and transparent” review of its dual listing in London and Sydney.
The UK-based hedge fund said on Thursday it will propose a motion at Rio Tinto’s next annual meeting on Jan. 16, claiming support from over 100 shareholders. The resolution would compel Rio Tinto’s board to assess whether unifying its structure under a single listing is in shareholders’ best interests and to share the findings with the market.
Palliser, which holds around $250 million of both Rio Tinto’s London and ASX-listed shares, has been campaigning for the miner to consolidate its primary listing in Australia since May. It claims the current dual-listed structure has deprived investors of $50 billion in value.
In early December, Palliser issued a letter challenging the justification for preserving the structural hierarchy of Rio Tinto Plc, the UK-listed entity.
The document raised several issues, including its inability to sustain dividends on its own, the small number of UK-based employees, its marginal contribution to the group’s EBITDA (earnings before interest, taxes, depreciation, and amortization), and the substantial trading discount relative to the Australian-listed counterpart, Rio Tinto Ltd.
Under the current dual structure, 77% of Rio Tinto’s shares are traded on the London Stock Exchange (LSE), with only 23% on the Australian Securities Exchange (ASX), presenting a significant challenge for the activist campaign.
If Rio Tinto follows the path of its rival BHP (ASX: BHP), which unified its corporate structure in Sydney two years ago, it would mark another significant loss for the FTSE 100 — the index of the largest companies listed on the LSE by market capitalization.
London’s financial market is already grappling with a decline in listings and a trend of corporate departures. Shell said in April it was considering exiting the LSE due to European investor apathy — if not outright hostility — toward fossil fuels companies.
A Rio Tinto departure would further exacerbate the issue. The company has a market capitalization of about £82 billion ($103 billion) in London. According to S&P Global Market Intelligence, the total market capitalization of London-listed mining stocks has fallen from $322 billion in 2018 to $272 billion in 2024. In contrast, mining sectors in Australia, Canada, and the US have each surpassed $325 billion.
Since 2020, miners listed on the LSE have raised only $8 billion, less than a quarter of the amounts raised in Sydney and Toronto.
Currently, 171 metals and mining companies are listed on the LSE, accounting for 17% of the global market capitalization in the sector. Much of this value is concentrated in a handful of major players, including Rio Tinto, Glencore (LON: GLEN), and Anglo American (LON: AAL).
Rio Tinto has operated under a dual listing since December 1995, and the company has downplayed the need for structural changes. In February, chief executive Jakob Stausholm described the issue as “the least important” on his agenda, while acknowledging minor benefits of unification, such as reducing duplicate head office functions, streamlining annual meetings, and eliminating dual primary listing fees.
Rio Tinto has not responded to MINING.COM’s request for comment.
