At a Glance
- Glencore, Rio Tinto explore merger talks to form $207 billion global mining giant.
- All-share buyout under review, investors split as Glencore shares rise, Rio Tinto falls.
- Copper strategy drives deal logic, coal assets and valuation key risks for shareholders.
Glencore, the Swiss mining and commodity trading giant, and Rio Tinto said Thursday they are in early discussions over a potential buyout that could create the world’s largest mining company, valued at about $207 billion.
Global miners are competing to expand in metals like copper, which is expected to benefit from the shift to renewable energy and rising demand from data centers powering artificial intelligence. Recent moves include Anglo American’s planned merger with Teck Resources to strengthen its copper holdings.
The disclosure follows reports that Glencore and Rio Tinto are revisiting a potential merger, marking the second time in just over a year the miners have explored a tie-up. Glencore approached Rio Tinto in late 2024, but those talks ended without an agreement.
Investors divided on deal prospects
Details remain scarce, including which assets might be included, whether a premium would be offered or who would lead a combined group.
“The structure of a possible merger is unclear and would likely be complex, but we do believe there is a path to meaningful value for both companies,” Jefferies analysts said in a note.
Under UK takeover rules, Rio Tinto has until Feb. 5 to make a formal offer or walk away.
Glencore’s U.S.-listed shares rose 6% after confirmation of the talks, while Rio Tinto’s Australian-listed shares fell 6.3%, reflecting investor caution over deal terms.
“The share market tells you what you need to know. Investors are not happy with this,” said Hugh Dive, chief investment officer at Atlas Funds Management, a Rio Tinto shareholder.
Rio Tinto has a market value of about $142 billion, while Glencore is valued near $65 billion.
Copper focus raises asset questions
Large miners are seeking greater exposure to copper as demand rises from electric vehicles, renewable energy and data centers. S&P Global estimates global copper demand could rise 50% by 2040, while supply faces growing constraints.
That focus raises questions about Glencore’s coal business. Rio Tinto exited coal in 2018 and investors say any deal would likely require divestments.
“Coal would need to be sold to gain support from Australian shareholders,” said John Ayoub, a portfolio manager at Wilson Asset Management.
Analysts also flagged the risk of overpayment. “It comes down to price,” said Tim Hillier of Allan Gray. “If the premium is too high, shareholders could lose out.”
Leadership and cultural fit
Talks restarted late last year, according to a person familiar with the matter, after leadership changes at Rio Tinto. New CEO Simon Trott took over in August with a mandate to simplify the business and sharpen returns.
Some investors see potential benefits if discipline is maintained. “Glencore’s trading culture could add something Rio lacks,” said Andy Forster of Argo Investments. “The key is staying focused on value.”
Founded in 1974, Glencore operates in 35 countries and produces and trades a wide range of metals used in energy and industrial applications. Rio Tinto, founded in 1873, operates globally with a workforce of about 60,000 and remains the world’s largest iron ore producer.
