Rio Tinto and Glencore are discussing the possibility of a merger, which would be the largest deal in the history of the mining industry, the agency has reported. Bloombergwhich cites sources close to the companies. Specifically, they explain that “Rio and Glencore have held preliminary talks on an agreement”, although they do not specify whether they are still underway. The two firms have declined to comment.
Rio Tinto is the second largest mining company in the world, with a capitalization of about $103 billion, while Glencore is valued at about $55 billion. A merger could create a giant that would surpass the sector leader, BHP, which is worth around 126 billion.
The mining industry has been rocked by a wave of deals in recent years, driven largely by the race to dominate the market for copper, a metal key to advancing the decarbonization of electricity and transportation networks.
Both Glencore and Rio own some of the best copper mines in the world. However, Rio, like BHP, still relies heavily on iron ore to boost its profits, at a time when China’s construction boom is coming to an end after decades of expansion, and The iron ore market appears headed for a long period of weakness.
Glencore, which He already tried to negotiate a merger with Rio in 2014has been one of the most aggressive buyers in the sector. Its former CEO Ivan Glasenberg, who already led the attempt to acquire Rio then, still owns almost 10% of the company.
Glencore attempted to buy Teck Resources in 2023, but settled for taking the company’s coal unit. Last year, BHP attempted to buy Anglo American in a $39 billion deal, forcing Anglo to accelerate a restructuring of its business as part of its defense strategy, only to walk away empty-handed.
Buying Glencore would give Rio a stake in the Collahuasi mine in Chile, one of the richest copper deposits the company has coveted for more than a decade.
Glencore also runs one of the world’s largest commodities trading businesses, buying, selling and shipping huge volumes of metals, coal and oil. A merger with Rio would raise questions about Glencore’s coal mining assets, a business Rio exited several years ago. Glencore is also the world’s largest shipper of thermal coal and a major producer of coking coal.
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