Commodities giants Rio Tinto (ASX:RIO,NYSE:RIO,LSE:RIO) and Glencore (LSE:GLEN,OTCPL:GLCNF) said on Thursday (January 8) that they have restarted talks about a potential business combination.
The two major miners spoke previously back in 2024, but failed to reach an agreement.
This time around, they say their preliminary discussions are centered around merging some or all of their businesses; this could include the acquisition of Glencore by Rio Tinto.
The news was first reported by the Financial Times, with both companies confirming the story via press release shortly thereafter. According to the news outlet, a deal between Rio Tinto and Glencore would create a massive mining company with an enterprise value north of US$260 billion.
The two firms have said there’s no guarantee that any transaction will go through.
However, it’s worth noting that Rio Tinto has changed leadership since the 2024 talks ended, with Simon Trott now at the helm. For its part, Glencore has reorganized its coal assets.
The Financial Times also notes that Glencore CEO Gary Nagle spoke last month about the importance of size in the mining industry, saying that bigger companies have various advantages.
“It makes sense to create bigger companies,” the executive explained to reporters. “Not just for the sake of size, but also to create material synergies, to create relevance, to attract talent, to attract capital.”
Regulations require Rio Tinto to announce its intentions either way by February 5 of this year.
Market reactions and sentiments
Markets reacted swiftly despite the uncertainty of the deal.
Glencore shares jumped nearly 10 percent on Friday (January 9), while Rio Tinto fell as much as 3 percent, signaling skepticism among its shareholders and concerns that the company could overpay. This sentiment was expressed by Hugh Dive, chief investment officer at Atlas Funds Management and a Rio Tinto shareholder.
“The share market tells you what you want to know. Investors are not happy with this,” Dive told Reuters.
While the expert acknowledged the appeal of expanding Rio’s copper footprint, he warned that large-scale mining mergers have a poor historical track record due to factors like dilution.
Supporters of the deal, however, argue that scale itself has become a competitive advantage in mining.
Derren Nathan, head of equity research at Hargreaves Lansdown, said consolidation across natural resources shows no signs of slowing in early 2026. “A full combination would create a global leader in multiple industrial metals including iron ore and transition metals such as copper, cobalt and lithium,” Nathan told the Guardian, further noting that these materials are critical to technologies at the center of the artificial intelligence boom.
In December, Glencore’s Nagle said the company’s ambition is to become “the biggest copper producer in the world.” Currently, Glencore is the world’s sixth largest copper producer.
Prices for the red metal hit a record above US$13,300 per metric ton this week, spurred by forecasts of a supply shortfall that could reach as much as 10 million metric tons by 2040.
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Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.
Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
