Rio Tinto is in early talks to buy Glencore, the companies said, in what could create the world’s largest mining firm with a combined market value of nearly US$207 billion (S$266 billion).
Global miners are racing to bulk up in metals, including copper, that are set to benefit from an energy transition and artificial intelligence (AI) demand. That has sparked a wave of project expansions and takeover attempts, including a pending merger of Anglo American and Teck Resources to create a copper-focused industry heavyweight.
Rio Tinto and Glencore revealed little on what a tie-up might look like, including which assets could be included, in what is the second round of talks in just over a year between the two after Glencore approached Rio Tinto in late 2024 for a deal that did not ultimately proceed.
The companies said on Jan 8 the expectation was it would involve an all-share buyout of “some or all” of Glencore by Rio Tinto.
The market value of the combined company would top Australia’s BHP Group at US$161 billion.
They did not disclose whether there would be a takeover premium or who would manage the combined company if the world’s largest-ever mining deal was completed.
“The structure of a possible merger between these two companies is unclear and would likely be complex, but we do believe there is a path to significant value creation for both,” wrote Jefferies analysts.
The companies said there was no certainty that the terms of any deal or offer would be agreed upon, after the Financial Times first reported the revived talks.
Under British takeover rules, Rio Tinto has until Feb 5 to make a formal offer for Glencore or say it will not proceed.
US-listed shares of Glencore were up 6 per cent after the talks were confirmed. But Rio Tinto’s Australian-listed shares fell as much as 6.4 per cent in the biggest intra-day fall since July 2022.
Mr Tim Hillier, an analyst at fund manager Allan Gray, a Rio Tinto investor, said there is a risk that it could overpay.
“It comes down to price, but if they have to pay a big premium, there is a risk that a transaction could destroy some value for shareholders,” he added. “Rio has a strong pipeline of internal high-growth projects. It’s not clear why they need to look externally for things to do.”
Rio Tinto, the world’s biggest iron ore miner, has a market capitalisation of about US$142 billion. Glencore, one of the world’s largest base metal producers, is valued at US$65 billion as of its last close.
Copper versus coal
Rio Tinto and Glencore are both shifting their focus towards copper, a commodity expected to be in high demand as the world adopts greener forms of energy and the take-up of power-hungry AI gains ground. Global copper demand is expected to rise 50 per cent by 2040, but supplies are expected to fall short by more than 10 million metric tonnes annually without more recycling and mining, consultancy S&P Global said on Jan 8.
With copper in the spotlight, questions about a tie-up include the fate of Glencore’s coal assets after Rio Tinto offloaded the last of its coal operations to the Swiss-based mining and commodities marketing firm in 2018.
China, the dominant buyer of industrial metals, would be likely to raise antitrust hurdles, said RBC analyst Kaan Peker.
Rio Tinto has undergone significant changes since the 2024 approach by Glencore.
Rio Tinto’s new chief executive officer Simon Trott was selected after its chairman expressed a preference for a leader more open to large-scale deals than his predecessor Jakob Stausholm, who was in charge when the miner turned down Glencore’s approach in late 2024.
Under Mr Trott, who took over in August 2025, Rio Tinto is focused on becoming leaner with fewer non-core assets.
Mr Andy Forster, senior investment officer at Rio Tinto shareholder Argo Investments, said the deal made sense if the terms were right for both companies.
“The biggest question mark would be the culture of the two companies as Glencore clearly has a trading background, is very opportunistic and results-focused; some of those aspects of their culture could actually be good for Rio,” he noted. “I hope Rio stays disciplined but it makes sense to look at deals where value can be extracted by both parties.” REUTERS