\n<\/p>\n
Rio Tinto and Glencore have restarted talks over a merger that would create the world\u2019s largest mining company.<\/p>\n
The talks come almost a year after previous discussions between the two mining companies collapsed. If a deal is agreed, it would create a global mining business with an enterprise value of more than $260bn (\u00a3193bn).<\/p>\n
The two companies said on Friday that they were in \u201cpreliminary discussions\u201d about a \u201cpossible combination of some or all of their businesses, which could include an all-share merger\u201d.<\/p>\n
Rio Tinto, which has an enterprise value of $162bn, said the deal under discussion would potentially result in it acquiring Glencore.<\/p>\n
Rio Tinto, founded in 1873, has about 60,000 employees across 35 countries, while Glencore \u2013 which was established in the 1970s as a trading company \u2013 has operations in more than 30 countries and a workforce of about 150,000 through employees and contractors.<\/p>\n
\u201cThe parties\u2019 current expectation is that any merger transaction would be effected through the acquisition of Glencore by Rio Tinto by way of a court-sanctioned scheme of arrangement,\u201d the company said in a statement. \u201cThere can be no certainty that an offer will be made or as to the terms of any such offer, should one be made.\u201d<\/p>\n
The resumption of the talks follows the $53bn merger of the London-listed miner Anglo American with its Canadian rival Teck in September, combining two of the world\u2019s largest copper producers.<\/p>\n
Anglo had previously rebuffed a \u00a339bn takeover proposal from BHP Group, while Teck rejected a buyout offer from Glencore in 2023 for \u00a316.6bn.<\/p>\n
Copper prices hit an all-time high of more than $13,300 a tonne this week, as analysts predicted there could be a supply shortfall of as much as 10m tonnes by 2040.<\/p>\n
\u201cLast year\u2019s theme of consolidation in the natural resources sector has shown no sign of let-up in the early part of 2026,\u201d said Derren Nathan, the head of equity research at Hargreaves Lansdown.<\/p>\n
\u201cA full combination would create a global leader in multiple industrial metals including iron ore and transition metals such as copper, cobalt and lithium.\u201d The resources are critical in the production of technology products, including smartphones, at the centre of the boom in AI.<\/p>\n
In December, Gary Nagle, Glencore\u2019s chief executive, said the company\u2019s aim was to become \u201cthe biggest copper producer in the world\u201d. It is the world\u2019s sixth-largest copper producer and the largest listed coal producer.<\/p>\n
Rio Tinto and Glencore held talks over a tie-up in 2024 but they failed on issues including valuation, who would run the combined company and the future of Glencore\u2019s coalmining operations.<\/p>\n
In May, Glencore confirmed a restructure of its business to move its coal operations into a separate Australian-based entity. Rio Tinto sold its last coalmine in 2018.<\/p>\n
However, Rio is said to be open to the possibility of retaining Glencore\u2019s coal business, according to a report by Bloomberg.<\/p>\n
Rio\u2019s potential return to coal would follow a significant change in the political climate towards fossil fuels.<\/p>\n
Donald Trump has led a backlash against green policies \u2013 earlier this week he pulled the US out of a key United Nations climate treaty \u2013 while large oil and gas companies have been scrapping renewable energy targets and upping production of fossil fuels.<\/p>\n
Since the previous talks between the two companies ended, Rio has appointed a new chief executive, Simon Trott, who took over in August.<\/p>\n
\u201cThe diverse asset base and likely synergies have the potential to provide further protection against commodity price fluctuations,\u201d said Nathan. \u201cBut just how Glencore\u2019s coal and trading arms fit in with Rio\u2019s business model, and push for improved sustainability credentials, are key questions to answer.\u201d<\/p>\n
Under UK takeover rules, Rio Tinto has until 5 February to either make a formal offer for Glencore or confirm it is not proceeding with a deal.<\/p>\n
Rio is listed on the FTSE 100 and on the Australian stock exchange. Its shares fell 6% in Australia on Friday. Rio\u2019s London listed shares closed 3% down, while Glencore\u2019s rose by nearly 10%.<\/p>\n
Nagle, the former head of Glencore\u2019s coal assets, took over from the longtime boss Ivan Glasenberg in 2020. Glasenberg, who ran Glencore for 18 years, was one of a handful of top executives to become billionaires at the company\u2019s colossal flotation in 2011.<\/p>\n
The flotation revealed that Glasenberg had a paper fortune of almost \u00a36bn, a figure so large that his 3,600 neighbours in the Swiss village of R\u00fcschlikon received a tax cut.<\/p>\n
Glasenberg\u2019s close lieutenants, Daniel Mat\u00e9, Telis Mistakidis, Tor Peterson and Alex Beard, all owned stakes worth about \u00a32bn at that time.<\/p>\n
Glencore was founded in 1974 by the metals trader Marc Rich but, in 1983, he was indicted on charges described by the then US attorney for New York, Rudy Giuliani, as \u201cthe biggest tax evasion case in United States history\u201d.<\/p>\n
In December, Glencore\u2019s Nagle said that the mining industry needed to further consolidate \u201cnot just for the sake of size, but also to create material synergies, to create relevance, to attract talent, to attract capital\u201d.<\/p>\n
In 2007, Rio Tinto bought Canada\u2019s Alcan to create the biggest producer of aluminium in the world, a move to diversify beyond its core iron ore and copper businesses.<\/p>\n
In the same year, Freeport-McMoRan completed its acquisition of Phelps Dodge Corp to form the world\u2019s largest publicly traded copper company.<\/p>\n
Five years later, Glencore agreed an all-share takeover of the Switzerland-headquartered Xstrata, beating a hostile bid from Aloca, creating a commodities conglomerate spanning mining, agriculture, oil and trading.<\/p>\n
In 2023, Newmont, the world\u2019s largest goldminer, acquired Australia\u2019s biggest gold producer, Newcrest Mining.<\/p>\n","protected":false},"excerpt":{"rendered":"
Rio Tinto and Glencore have restarted talks over a merger that would create the world\u2019s largest mining company. The talks come almost a year after previous discussions between the two mining companies collapsed. If a deal is agreed, it would create a global mining business with an enterprise value of more than $260bn (\u00a3193bn). The<\/p>\n","protected":false},"author":1,"featured_media":41178,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[49],"tags":[22007,661,22006,1910,1094,1916,173,1456,22005],"class_list":{"0":"post-41177","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business","8":"tag-260bn","9":"tag-firms","10":"tag-glencore","11":"tag-merger","12":"tag-mining","13":"tag-restart","14":"tag-rio","15":"tag-talks","16":"tag-tinto"},"_links":{"self":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/posts\/41177","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=41177"}],"version-history":[{"count":0,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/posts\/41177\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/media\/41178"}],"wp:attachment":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=41177"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=41177"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=41177"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}