BHP, Rio's London stock cheap Mining Australian shares trade at a premium in wake of Brexit Peter Ker The Australian shares of BHP and Rio Tinto have appreciated rapidly compared to the miners' London shares. 
It was one of the biggest trades in the market during the mining boom and now the share price "spreads" for BHP Billiton and Rio Tinto are in rare territory once more.
The dual-listed structure that both miners operate under gives investors a choice between buying shares in the companies' Australian stock or their UK stock.
The London and Australian stock have exposure to exactly the same assets, but that doesn't mean they are priced the same.
Take BHP for instance; the miner's Australian shares were about 16.8 per cent more expensive than its London shares on Tuesday when both are converted into a common currency like US dollars.
That "spread" has emerged rapidly, with BHP's London stock trading at a small premium as recently as   October 2015. The past three weeks have seen the "spread" blow out, with Britain's decision to exit the European Union (and the subsequent fall in the UK currency) clearly being a catalyst.
On   June 24, the day Brexit became a reality, BHP's Australian shares were trading at a premium of just 11 per cent.
Rio's shares have behaved in a similar manner; the company's London shares were trading a small premium during the Australian winter of 2015, but by   February 2016 the Australian stock was enjoying a premium of almost 8 per cent. That premium was beyond 17per cent on Tuesday, and was about 16.4 per cent on Wednesday.
The spreads haven't been beyond 20 per cent since the peaks of the mining boom in 2011 and 2012, when the two companies' Australian shares traded at close to a 25 per cent premium. Not surprisingly, many investors sought to take advantage of that arbitrage opportunity in 2011.
Shaw and Partners analyst Peter O'Connor said the spread remained highly traded and closely watched. "To a large extent the spread goes where the currencies go," he said.
Citi analyst Clarke Wilkins said the existence of franking credits in Australia had traditionally been viewed as a reason for the Australian stock to trade at a premium. But he said there were other factors at play. "There's a lot of factors that drive it, some of it is quantifiable, some of it is not," he said.
"BHP and Rio are big parts of the index in Australia and there are factors like the big retail following here which probably make it a stickier shareholder base in Australia."