Mining firms Rio Tinto and Glencore restart $260bn merger talks | Mining
Rio Tinto and Glencore have resumed merger talks that would create the world’s largest mining company.
If a deal is reached, it would come almost a year after previous talks between the two mining companies collapsed, creating a global mining business with an enterprise value of more than $260bn (£193bn).
The two companies said Friday that they are in “preliminary discussions” about “a possible combination of some or all of their businesses, which could include an all-stock merger.”
Rio Tinto, which has an enterprise value of $162 billion, said the deal being discussed would potentially result in its acquisition of Glencore.
“The parties’ current expectation is that any merger transaction will be accomplished through the acquisition of Glencore by Rio Tinto through a court-approved plan of arrangement,” the company said in a statement. “There can be no certainty that an offer will be made or, if made, the terms of such an offer.”
The resumption of negotiations follows London-listed miner Anglo American’s $53 billion merger with Canadian rival Teck in September, combining the world’s two largest copper producers.
Anglo had previously turned down a £39bn takeover bid from BHP Group; Teck, on the other hand, rejected Glencore’s £16.6 billion acquisition offer in 2023.
Copper prices hit an all-time high of over $13,300 per tonne this week, with analysts predicting a supply shortfall of up to 10 million tons by 2040.
In December, Glencore’s CEO, Gary Nagle, said the company’s goal was to become “the world’s largest copper producer.” It is currently the world’s sixth largest producer of copper and the largest listed producer of coal.
Rio Tinto and Glencore have held talks about merging in 2024 but fell apart on issues such as valuation, who would run the combined company and the future of Glencore’s coal mining operations.
In May, Glencore confirmed it was restructuring its business to move its coal operations to a separate entity based in Australia. Rio Tinto sold its last coal mine in 2018.
Under UK takeover rules, Rio Tinto has until February 5 to make a formal offer for Glencore or confirm that no deal has been reached.
Rio is listed on the FTSE 100 and the Australian stock exchange. Its shares fell 6% in Australia on Friday.
