Glencore mulls gold spin-off after float

Glencore International, the commodities trader which is heading to the London Stock Exchange next week with a $60bn flotation, is looking again at spinning off its gold assets.

Sources close to the mining giant said separating its gold assets, which mainly consist of the biggest gold mine in Kazakhstan, is one option being considered after the float.

"Glencore will re-examine spinning off the gold to get the maximum multiple. Gold prices are at a high and the assets could be worth as much as $5bn," said one banker.

The Kazzinc gold unit, in which it holds a 51 per cent stake, produces almost as much gold as recently-listed African Barrick Gold. But, any plans may be challenged by opposition leaders in Kazakhstan who are claiming that the privatisation of Kazzinc was "illegal".

Demand for shares was said to be strong yesterday with the offer several times over-subscribed and advisers hope to close the offer earlier than planned this week. The shares are likely to be priced at lower-to-mid end of the 480p to 580p range reflecting the volatility in the commodities markets.

Glencore's chief executive, Ivan Glasenberg, has tried to dampen fears it will be hit by the recent rout in the commodities market telling investors in Hong Kong, where it is also listing, that falls reflected market "froth". After the IPO, Glencore will also look to expand its grains and oil businesses.