$260b mega-merger of Rio Tinto, Glencore back on the table

International mining company Glencore has revealed it has re-engaged with Rio Tinto about a deal that would create the world’s biggest mining company, a little over a year after talks between the two companies collapsed.

Glencore said on Friday (AEDT) that it was in preliminary talks with Rio, with options including an all-share transaction that would see Rio buy Glencore. Glencore said there was no certainty of a deal, adding that a further announcement would be made as appropriate. Rio Tinto declined to comment.

A Glencore merger with Rio Tinto would produce a company with market-leading positions in iron ore, copper, nickel, zinc and coal. Credit: Christian Sprogoe

The fresh talks come amid a wave of deal-making in the sector as the biggest miners look to bulk up on copper, a crucial metal for the energy transition that is trading near record highs. Teck Resources and Anglo-American agreed to merge last year, while BHP Group has made attempts to buy Anglo.

After failing to reach an agreement in 2024, Glencore continued to work behind the scenes with its bankers on what a potential deal with Rio could look like, Bloomberg has previously reported.

If the two did merge, the combined business would leapfrog BHP – worth $203 billion – to become the world’s largest mining company, and the second-largest copper producer.

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Management has taken steps to prime Glencore to be able to move quickly, and Glencore Chief Executive Gary Nagle has repeated in private conversations that it’s a deal that should get done – describing a Rio-Glencore tie-up as the most obvious deal in the industry.

Since the previous talks collapsed – primarily because of valuation – Rio has replaced its chief executive, while Glencore has sought to convince investors – and potential buyers – of its plans to grow its copper business.

Glencore shares rose as much as 7.7 per cent and Rio Tinto fell as much as 3.9 per cent.

The deal was under discussion as recently as this week, the Financial Times reported on Thursday, citing people familiar with the matter that it didn’t identify.

More to come.

Bloomberg

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