'Growth for growth's sake isn't for us': Glencore returns $1bn back to shareholders

The mining giant's shares rose 2% after it launched a $1bn share buyback.

by Elizabeth Anderson
Last Updated: 07 Sep 2015

Glencore smashed forecasts by reporting an 8% jump in first-half profits to $6.5bn, and the commodities and mining giant has now launched a share buy-back programme of up to $1bn (£60bn) over the next six months. Shares rose 2% to 365p when the markets opened, although settled to around 358p by mid-morning.

London-listed Glencore said last week that it had gained $7bn from the sale of its Peruvian copper operation Las Bambas to a Chinese consortium in April. This allowed the company to return some of its excess gains to shareholders. It may not be the most imaginative way to spend $1bn, but it means Glencore will return capital to investors before rivals BHP Billiton and Rio Tinto.

BHP Billiton's shares dropped almost 5% when it announced earlier this week that it wasn't yet ready to start returning cash to investors. 

Glencore also declared an interim dividend of $0.06 a share, up 11% from a year ago.

Mining companies are currently facing slower growth as the sector starts to take a turn after a decade-long period of rising growth. Glencore has benefitted from an increase in output helped by its acquisition of Xstrata.

'We remain the most diversified natural resources company by activity, commodity and geography, providing us with a stable operating platform as well as a high degree of optionality to underlying prices and bolt-on or brownfield development opportunities. We look to the future with optimism based on our strong starting point and our culture of entrepreneurialism and hard work to leverage tightening commodity fundamentals,' CEO Ivan Glasenberg said.

He added: 'Growth for growth's sake isn't for us,' the Wall Street Journal reported.

Glencore's share price has risen 6% to 360p in the last six months.

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