Mining giants Rio Tinto (ASX: RIO) and Glencore (LON: GLEN) have revived discussions about combining their operations in what would form the industry’s largest company with a market value exceeding $200 billion.
The companies confirmed Thursday they are in preliminary talks about merging parts or the entirety of their operations, potentially through an all-share acquisition of Glencore by Rio Tinto. The discussions mark the second attempt at a deal after negotiations broke down in late 2024 over valuation disagreements and concerns about Glencore’s coal operations.
Rio Tinto faces a February 5 deadline to announce a firm offer or declare it will not proceed with the acquisition, according to UK takeover regulations.
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Copper demand has driven the renewed interest, with prices reaching record levels above $13,000 per ton in recent days. Both companies own substantial copper holdings critical for electric vehicle manufacturing and artificial intelligence infrastructure.
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Glencore’s stock surged approximately 10% on the news, while Rio Tinto’s Australian-listed shares fell 6% as investors expressed concerns Rio Tinto might pay too much.
“The share market tells you what you want to know. Investors are not happy with this,” Hugh Dive, chief investment officer at Atlas Funds Management and a Rio Tinto shareholder, told Reuters.
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The deal faces significant regulatory hurdles, particularly from China, which approved Glencore’s 2013 acquisition of Xstrata only after the company sold its stake in Peru’s Las Bambas copper mine for nearly $6 billion to Chinese investors.
Rio Tinto’s new CEO Simon Trott, who took over in August, has signaled greater openness to large acquisitions than his predecessor. The company exited coal in 2018 but may now consider retaining Glencore’s coal business, according to people familiar with the matter.
The proposed combination follows last September’s $66 billion merger agreement between Anglo American and Canada’s Teck Resources, part of a broader wave of consolidation in the mining sector driven by competition for copper and other transition metals.
Neither company provided details on potential deal terms. Both emphasized that no agreement has been reached and there is no certainty that an offer will be made.
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