Rio Tinto and Glencore have held talks over a potential merger that would be the mining sector’s biggest ever deal.
The London-listed mining giants have held early-stage discussions about a combination of the two businesses, Bloomberg reported last night.
A deal would topple industry leader BHP from the top spot and create a company worth around £130billion.
It comes amid a wave of dealmaking in the sector over the last few years as miners attempt to boost their copper production – a metal that is seen as key to the green energy transition.
And it follows BHP’s failed attempt to buy London-listed miner Anglo American last year.
The Australian giant walked away from takeover talks after fierce opposition from Anglo’s board, abandoning what would have been one of the biggest ever mining sector tie-ups.
London-listed mining giants Rio Tinto and Glencore have held talks over a potential merger
As part of its fightback, Anglo unveiled a major restructuring plan to split itself up including the sale of its diamond arm De Beers.
Last year Switzerland-headquartered Glencore, which has a market capitalisation of nearly £45billion, completed the £5.6billion acquisition of Canadian miner Teck Resources’ steelmaking coal unit.
And Rio Tinto chief Jakob Stausholm said he would not rule out large deals in the copper sector.
But he warned that major M&A deals can present a ‘big risk’ that could ‘derail the whole company’.
Rio Tinto, which is worth around £84billion, is the world’s largest producer of iron ore.
It depends on the mineral to drive its profits at a time when the market looks set for an extended period of weakness.
Bloomberg reported yesterday that it is not clear whether merger talks between Glencore and Rio Tinto are ongoing.
A Glencore spokesman said: ‘We do not comment on market rumour or speculation’. Rio Tinto was not immediately available for comment.
Rio Tinto said it does not comment on market rumour.
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