Glencore and Rio Tinto held talks on mining’s biggest-ever potential merger, say reports

Glencore and Rio Tinto are said to have discussed a potential merger, according to news reports. Keystone-SDA

The Swiss-based mining and commodities group Glencore and the British mining company Rio Tinto reportedly held early-stage talks last year about combining their businesses.

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Representatives of both companies discussed whether they should combine part or all of their businesses, the Bloomberg news agency reported on Thursday evening, citing people familiar with the affair.

It is not clear whether the talks are still ongoing. The Financial Times, meanwhile, said it had learned from insiders that the negotiations did not progress to a deal. According to the FT, the two companies held early-stage talks as recently as October.

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The companies declined to comment.

According to the FT, the talks between the two companies followed BHP’s failed bid for Anglo American last year, which prompted rivals to review strategic options.

A race has broken out in the raw materials industry to see who is best positioned for the transformation of the energy industry and decarbonisation.

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Among other things, the market position in lithium and copper is at stake. Glencore and Rio Tinto both have large copper mines. But Rio Tinto still earns huge profits from iron ore, while Glencore is still heavily involved in the coal business.

The boom in iron ore over the past few years is mainly due to steel consumption in China, which is no longer growing as strongly as it used to. Coal is tending to lose importance as an energy source with the global expansion of renewable energies.

A merger of the two giants would result in a de facto takeover of Glencore by Rio Tinto. The latter is the world’s second-largest mining group after BHP, with a market capitalisation of $103 billion dollars. Glencore has a market capitalisation of $55 billion.

Translated from German by DeepL/sb

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