Rio Tinto in talks to buy Glencore to form world’s biggest miner

By Clara Denina and Scott Murdoch

LONDON/SYDNEY, Jan 8 (Reuters) – Rio Tinto is in early talks to buy Glencore, the companies said, in what could create the world’s largest mining company with a combined market value of nearly $207 billion.

Global miners are racing to bulk up in metals including copper, set to benefit from the energy transition and artificial intelligence demand. That has sparked a wave of project expansions and takeover attempts, including the pending merger of Anglo American and Teck Resources to create a copper-focused industry heavyweight.

Rio Tinto and Glencore revealed little on what a tie-up might look like, including which assets could be included, in what is the second round of talks in just over a year between the two after Glencore approached Rio Tinto in late 2024 for a deal that did not ultimately proceed.

The companies said late on Thursday the expectation was it would involve an all-share buyout of “some or all” of Glencore by Rio Tinto.

They did not disclose whether there would be a takeover premium or who would manage the combined company if the world’s largest-ever mining deal was completed.

“The structure of a possible merger between these two companies is unclear and would likely be complex, but we do believe there is a path to significant value creation for both,” Jefferies analysts wrote.

The companies said there was no certainty that the terms of any deal or offer would be agreed upon after the Financial Times first reported the revived talks. Under UK takeover rules, Rio Tinto has until February 5 to make a formal offer for Glencore or say it will not proceed.

U.S.-listed shares of Glencore were up 6% after the talks were confirmed. But Rio Tinto’s Australian-listed shares ended 6.3% lower, reflecting investor scepticism towards a deal and concerns that Rio Tinto will overpay.

“The share market tells you what you want to know. Investors are not happy with this,” said Hugh Dive, chief investment officer of Atlas Funds Management, a Rio Tinto shareholder.

“I like the concept of going to copper, but the record is dreadful for the big majors making acquisitions or even mergers. We’ve seen a lot of these big mergers occur at the top of the market, and they end up being very dilutive over time,” he said.

Rio Tinto, the world’s biggest iron ore miner, has a market capitalisation of about $142 billion. Glencore, one of the world’s largest base metal producers, is valued at $65 billion as of its last close.

COPPER VERSUS COAL

Rio Tinto and Glencore are both shifting their focus towards copper, a commodity in high demand as the world adopts greener forms of energy and the take-up of power-hungry data centres for AI gains ground.

Global copper demand is expected to rise 50% by 2040, but supplies are expected to fall short by more than 10 million metric tons annually without more recycling and mining, consultancy S&P Global said on Thursday.

With copper in the spotlight, questions about a tie-up include the fate of Glencore’s coal assets after Rio Tinto offloaded the last of its coal operations to the Swiss-based mining and commodities marketing firm in 2018.

“Coal would have to be divested to garner the support of the Australian shareholder base,” said John Ayoub, portfolio manager at Rio Tinto investor Wilson Asset Management.

Tim Hillier, an analyst at fund manager Allan Gray, a Rio Tinto investor, said there is a risk that it could overpay.

“It comes down to price, but if they have to pay a big premium there is a risk that a transaction could destroy some value for shareholders,” he said.

“Rio has a strong pipeline of internal high-growth projects. It’s not clear why they need to look externally for things to do,” he added.

China, the dominant buyer of industrial metals, would be likely to raise antitrust hurdles, said RBC analyst Kaan Peker.

The market value of the combined company would top Australia’s BHP Group at $161 billion. BHP shares closed 0.8% higher on Friday.

CULTURAL QUESTIONS

Rio Tinto and Glencore restarted deal talks at the end of 2025, according to a source with knowledge of the matter.

Rio Tinto has undergone significant changes since the 2024 approach by Glencore. New Rio Tinto CEO Simon Trott was selected after the company’s chairman expressed a preference for a leader more open to large-scale deals than his predecessor, Jakob Stausholm, who was in charge when the miner turned down Glencore’s approach in late 2024.

Under Trott, who took over in August, Rio Tinto is focused on becoming leaner with fewer non-core assets.

Andy Forster, senior investment officer at Rio Tinto shareholder Argo Investments, said the deal made sense if the terms were right for both companies.

“The biggest question mark would be the culture of the two companies as Glencore clearly has a trading background, is very opportunistic and results-focused, some of those aspects of their culture could actually be good for Rio,” he said. “I hope Rio stays disciplined but it makes sense to look at deals where value can be extracted by both parties.”

(Reporting by Clara Denina in London and Scott Murdoch in Sydney; Additional reporting by Christine Chen in Sydney, Melanie Burton in Melbourne and Shivani Tanna and Sameer Manekar in Bengaluru; Editing by Veronica Brown, Tony Munroe and Jamie Freed)