Two mining giants, Glencore and Rio Tinto, announced Friday that they have restarted merger talks, as commodity producers around the world seek to unite in the face of growing demand for copper and other metals.
The companies separately said they were exploring a potential transaction, including an all-stock consolidation of their businesses. The most likely outcome is that Rio Tinto, whose market capitalization is about twice that of Glencore, buys out its smaller rival.
The two companies, both listed on the London Stock Exchange, are said to have a combined market value of around 150 billion pounds, or $201 billion.
Glencore and Rio Tinto have warned they may not reach an agreement before the February 5 regulatory deadline. A merger would continue a wave of deals across the mining industry.
One of the main drivers of this renewed interest is copper, which has reached record prices over the past year, both due to demand from the clean energy and technology sectors and uncertainty over President Trump’s plans to impose taxes on the metal.
Copper was a major factor behind the merger of two major mining rivals, Anglo American and Teck Resources, in one of the sector’s largest-ever deals. BHP Billiton, the world’s largest mining company, only recently ended its effort to buy Anglo American, while Glencore made an unsuccessful bid for Teck, ultimately buying one of Teck’s coal operations.
Glencore and Rio Tinto held negotiations for a tie-up in 2024, but called off the talks due to a disagreement over valuations. Since then, however, Rio Tinto has appointed its chief executive Simon Trott, who has spoken openly about considering changes to support the company’s growth.
His Glencore counterpart, Gary Nagle, spoke of his company’s ambitions to become “the largest copper producer in the world”, he said in December. (Glencore is currently the sixth largest, with one of its most important assets being a giant copper mine in Chile.)
Glencore has also overhauled its business mix, including consolidating its coal operations into a single entity based in Australia. That could make the deal more attractive to Rio Tinto, which exited coal almost a decade ago and is seen by some analysts as potentially reluctant to return to the sector.
Glencore shares jumped almost 10 percent on Friday. Shares in London-based Rio Tinto fell more than 2 percent after the news, while shares in Australia fell more than 6 percent.
