Swiss- and British-based mining company Xstrata has confirmed that it is in merger discussions with Swiss-based commodities trader Glencore International.

In response to speculation that the two were in talks, Xstrata released a statement on Thursday confirming that Glencore had proposed an all-share merger of equals. However, Xstrata also pointed out that there was no certainty of any offer being made.

Glencore, which already holds more than a third of Xstrata shares, now has until March 1 to declare whether it plans to make a firm offer.

Thursday’s announcement from Xstrata marked the first time that there had been public confirmation of formal merger talks between the two.

Xstrata is one of the world’s top five producers of copper, thermal and metallurgical coal, ferrochrome, zinc and nickel. It employs over 70,000 people in more than 20 countries.

Glencore extracts, ships and refines raw materials such as coal, copper and corn. It was set up by controversial trader Marc Rich in 1974 as Mark Rich & Co.

If the merger becomes reality, the result will be an industry giant with about $175 billion (SFr161 billion) worth of revenues.

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