Rio Tinto Group and Glencore Plc have been discussing the possibility of combining their businesses, according to people familiar with the matter. in what could result in the largest deal in the history of the mining industry.
Rio and Glencore have recently held preliminary talks on a dealsaid the people, who asked not to be identified because the information is confidential. It is unclear whether talks are still underway.
Rio Tinto is the world’s second-largest miner, with a market value of about $103 billion at the close of trading in London on Thursday, while Glencore was valued at about $55 billion. Combining the two companies would potentially create a giant that would surpass the industry’s long-standing leader, BHP Group, which is worth about $126 billion.
Representatives for Rio and Glencore declined to comment. Rio’s American depositary receipts (ADRs) fell while Glencore’s rose.
The mining industry has been buoyed by a wave of deals over the past two years, largely driven by the biggest producers’ desire to expand in copper.a metal central to the world’s decarbonization efforts.
Both Glencore and Rio own some of the best copper mines in the world. However, Rio, like BHP, still relies heavily on iron ore to boost its profits, at a time when China’s decades-long construction boom is coming to an end and the iron ore market appears headed for a prolonged period of weakness.
Glencore, which had already proposed a merger with Rio in 2014, has been one of the most aggressive negotiators in the sector. Its former CEO Ivan Glasenberg, who led the pre-Rio bid, still owns almost 10% of the company.
Glencore tried unsuccessfully to buy Teck Resources Ltd. in 2023, but instead settled for the smaller company’s coal unit. Last year, BHP attempted to buy Anglo American Plc in a $49 billion deal, forcing Anglo to accelerate a restructuring of its business as part of its defense strategy.before finally leaving empty-handed.
Buying Glencore would give Rio a stake in the Collahuasi mine in Chile, one of the richest deposits, which the company has coveted for more than a decade.
Glencore also operates one of the world’s largest commodities trading businesses, buying, selling and shipping huge volumes of metals, coal and oil.
A merger with Rio would raise questions about Glencore’s coal mining assets, a business Rio divested several years ago. Glencore is also the world’s largest exporter of thermal coal and a major producer of coking coal.
