Rio Tinto Group is in talks to buy Glencore Plc to create the world’s biggest mining company with a combined market value of more than $200 billion, a little over a year after earlier talks between the two collapsed. The companies have been discussing a potential combination of some or all of their businesses including an all-share takeover, they said in separate statements on Thursday. Glencore shares surged 10% in London, while Rio Tinto retreated 2.2% after falling 6.3% in Australia.
A tie-up between the two companies would represent the largest-ever deal in an industry that has been gripped by takeover fever as the biggest producers seek to bulk up on copper — a crucial metal for the energy transition that is trading near record highs. Glencore and Rio both own large copper assets, and the potential transaction would create a new mining behemoth to rival BHP Group, which has long held the title of the biggest miner. Analysts have previously raised questions about potential hurdles to a deal.
Glencore is one of the world’s biggest producers of coal — a business that Rio has previously exited — while the two companies have very different cultures. However, people familiar with the matter said on Friday that Rio is open to retaining Glencore’s coal business if talks are successful. The structure and scope of any deal is still being discussed, but one of the key scenarios being considered is a takeover of the whole of Glencore including the coal business, said the people, who asked not to be identified discussing private information.
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No final decisions have been made, and Rio could also choose to offload the coal at a later date if a deal is successful. Rio Tinto has a market capitalization of about $137 billion, while Glencore is valued at $71 billion. The two held discussions in 2024, but the talks were abandoned after they failed to agree on valuation.
Since then, Rio replaced its CEO, while Glencore made an effort to publicly outline its copper growth prospects. In private conversations, Glencore CEO Gary Nagle has described a Rio-Glencore tie-up as the most obvious deal in the industry. Still, the gap between the two companies’ valuations had widened since the prior discussions.
That has played into an existing focus among mining executives and investors that future supplies of the metal are going to be tight. For Rio, a deal with Glencore would significantly expand its copper production and give the company a stake in the Collahuasi mine in Chile, one of the world’s richest deposits, and one that it has long coveted. While Rio already owns large copper assets, it and larger rival BHP both still get a substantial share of their earnings from iron ore, a market that faces an uncertain demand future as China’s decades-long construction boom is drawing to an end.
“It makes a lot of sense,” said Ben Cleary, portfolio manager at Tribeca Investment Partners. “It’s the one big deliverable mining deal out there.” Rio’s new CEO, Simon Trott, has so far focused on cutting costs and simplifying the business, and the company has vowed to offload some of its smaller units. Chairman Dominic Barton has signaled that Rio has moved on from a series of disastrous deals in its past, saying the company will be more open-minded when it comes to making acquisitions.
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