Global mining heavyweights Glencore and Rio Tinto have confirmed they have re-engaged in merger talks in what would amount to a blockbuster move that could see a merged entity become the world’s largest mining company.
Both companies released statements confirming preliminary discussions about a possible combination of some or all of their businesses. This could include an all-share merger between Rio Tinto and Glencore, with the merged entity potentially valued at more than US$260 billion ($388 billion), according to the Financial Times.
The companies said “the parties’ current expectation is that any merger transaction would be effected through the acquisition of Glencore by Rio Tinto by way of a court-sanctioned scheme of arrangement”.
The two miners previously discussed a merger in late 2024 before talks were shelved.
What would a merger mean?
While details of the current discussions remain thin on the ground, the 2024 talks provide insight into the potential rationale for a merger, with copper emerging as a key factor in making any deal work.
Both companies have identified copper as a cornerstone commodity in their future strategies.
Since taking over as Rio Tinto chief executive officer (CEO) in August, Simon Trott has worked to implement a strategy aimed at simplifying and streamlining the company’s focus around three key business units: iron ore, copper, and aluminium and lithium.
Rio Tinto’s copper business, led by Katie Jackson, has been positioned to capitalise on the global energy transition, with resources directed toward ramping up major copper projects. These include Oyu Tolgoi in Mongolia, stabilising the Kennecott mine in the US, advancing the Resolution Copper joint venture project in the US, and partnerships in South America such as Nuevo Cobre in Chile.
Glencore has also substantially built its copper business over the past decade, holding major mines, refineries and smelter operations globally. This includes its Mount Isa operations, which sit at the heart of Glencore’s zinc-lead-silver and copper processing footprint across north Queensland.
A combination of the two companies’ copper divisions would create an industry behemoth, able to draw on the experience, expertise and resources of both organisations.
Glencore also holds substantial positions across iron ore and aluminium-based products. This could present Rio Tinto with further opportunities to grow and extend its iron ore business as it looks to bring major projects such as Simandou in Guinea and Rhodes Ridge in the Pilbara into production.
If completed, the merger would place the newly created entity in a strong strategic position to challenge rivals such as BHP in becoming the world’s premier copper and critical minerals producer, an ambition Trott hinted at late last year.
“Our experienced leadership team is committed to delivering against our mission to become the most valued metals and mining company – for shareholders, the people who work with us, our partners and the communities around us,” Trott said.
Last month, Glencore CEO Gary Nagle also outlined the potential benefits that could flow from the merger of two major mining companies.
“It makes sense to create bigger companies,” Nagle said, as reported by the Financial Times. “Not just for the sake of size, but also to create material synergies, to create relevance, to attract talent, to attract capital.”
Should the deal happen, the global mining industry will have a new force to contend with that could reshape the industry for decades to come. BHP, for one, fresh from its failed bid to court Anglo American, will likely be watching closely.