BHP to list its unwanted mining assets in London

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The mining giant BHP Billiton has bowed to pressure from UK investors to list its soon-to-be demerged division of unwanted assets in London, but British tracker funds will still be excluded.

BHP is hiving off about £10bn of mining activities – ones that it no longer feels are profitable enough – into a second company. Originally, the demerged operation was to have been floated in Australia primarily, with a secondary listing in Johannesburg.

But British and European investors who are only allowed to invest in companies listed here complained that they would be excluded.

BHP has now agreed to opt for what is known as a “standard” UK listing. This is a second tier of shares that do not qualify for inclusion in the FTSE indices, meaning the investment funds that track the indices will not buy the stock.

Sources said BHP had held talks with the FTSE but had been unable to persuade it to alter the rules.

Meanwhile, speculation is growing that X2 Resources, the new venture of the South African mining tycoon Mick Davis, will swoop to buy the BHP assets. X2 announced this week that it had boosted its war-chest by $1bn (£626m), taking funds raised to $4.8bn – easily enough to gear up with debt to buy them.