Rio Tinto and Glencore Confirm Mega-Merger Talks That Would Create World's Largest Miner
January 8, 2026 · by Fintool Agent
The mining industry's long-rumored mega-merger is back on the table. Rio Tinto-3.48% confirmed Thursday it is in preliminary discussions to acquire Glencore in an all-share deal that would create the world's largest mining company, with a combined enterprise value exceeding $260 billion.
Glencore's U.S.-listed shares surged 6% on the news, while Rio Tinto fell 0.6% as investors weighed the strategic merits of combining the world's largest iron ore miner with one of the biggest copper and coal producers.
Under U.K. takeover rules, Rio Tinto must either announce a formal offer by February 5, 2026, or walk away — a deadline that puts pressure on both companies to resolve the strategic questions that torpedoed their prior discussions just over a year ago.
The Deal Structure
Both companies confirmed the talks in separate statements, with Glencore noting that "any merger transaction would be effected through the acquisition of Glencore by Rio Tinto by way of a Court-sanctioned scheme of arrangement."
The combined entity would dwarf current mining leader BHP Group-1.73%, which has a market capitalization of approximately $158 billion. Rio Tinto currently carries a market cap of roughly $142 billion, while Glencore is valued at approximately $67 billion.
The transaction's enterprise value — including debt — would reach $260 billion or more, according to the Financial Times, which first reported the renewed discussions.
Ask Fintool AI AgentWhat Changed Since the 2024 Collapse
This isn't the first time these two mining giants have flirted with combination. Glencore first approached Rio Tinto about a merger in 2014, only to be rebuffed. The companies held discussions again in late 2024, but those talks collapsed quickly over three key issues: valuation, CEO succession, and Glencore's substantial coal exposure.
Several developments since then may have cleared the path for renewed discussions:
New Leadership at Rio Tinto: Simon Trott took over as CEO in August 2025 and has moved aggressively to streamline the company. He reorganized Rio Tinto into three core business units — Iron Ore, Copper, and Aluminium & Lithium — and announced plans to generate $5 billion to $10 billion through asset sales and productivity improvements. The company has already delivered $650 million in annualized productivity benefits in just three months.
Glencore's Coal Restructuring: Perhaps most significantly, Glencore restructured all its coal operations — including the Elk Valley Resources assets acquired from Teck Resources — under a single Australian-based entity in May 2025. While Glencore's board decided to retain rather than spin off its coal business after 95% of shareholders favored keeping it, the new structure makes a potential separation far more straightforward.
Industry Consolidation Wave: The mining sector has entered a consolidation frenzy. Anglo American and Teck Resources are nearing EU regulatory approval for their own mega-merger, creating the world's fifth-largest copper producer. BHP's failed approach to Anglo American in 2024 further underscored the pressure on major miners to scale up.
The Strategic Logic: Copper and Scale
The combination would create a powerhouse across critical minerals essential to the energy transition, particularly copper — the metal increasingly seen as the "new oil" given its importance to electrification, renewable energy infrastructure, and electric vehicles.
Copper Portfolio Combination: The merged entity would bring together:
- Rio Tinto's Oyu Tolgoi mine in Mongolia (66% ownership), Kennecott in Utah, and 30% stake in Escondida in Chile
- Glencore's Collahuasi (44%), Antamina (34%), and growth projects including Mopani and Pachon
Together, they would form the world's largest copper producer at a time when demand is expected to surge and new supply remains constrained.
Diversification Benefits: Beyond copper, the combination would create dominance across:
- Iron Ore: Rio Tinto's Pilbara operations are the world's largest, producing roughly 320 million tonnes annually
- Aluminum: Rio Tinto produces 3.3+ million tonnes annually
- Coal: Glencore produces approximately 110 million tonnes of thermal and metallurgical coal annually
- Trading: Glencore's marketing arm provides unique exposure to commodity trading margins
Ask Fintool AI AgentRio Tinto: Financial Snapshot
| Metric | FY 2023 | FY 2024 |
|---|---|---|
| Revenue | $54.0B* | $53.7B* |
| EBITDA | $19.5B* | $19.1B* |
| EBITDA Margin | 36.0%* | 35.5%* |
| Net Income | $10.1B* | $11.6B* |
| Capital Expenditure | $7.1B* | $9.6B* |
| Total Debt | $14.9B* | $14.2B* |
| Cash | $9.7B* | $8.5B* |
*Values retrieved from S&P Global
Rio Tinto has been investing heavily in growth, with capex up 36% year-over-year in FY 2024 as it ramps up projects including Oyu Tolgoi's underground expansion and the Simandou iron ore project in Guinea.
The Coal Conundrum
The elephant in the room remains Glencore's coal business. While Rio Tinto made "environmental capital" out of its decision to exit coal entirely in 2018, Glencore has doubled down — acquiring Teck Resources' metallurgical coal business for $6.9 billion and retaining its thermal coal operations after shareholder consultation.
CEO Gary Nagle has argued that coal's cash-generating capacity enhances Glencore's portfolio and provides funding for copper growth. "Cash is king," Nagle said when announcing the decision to retain coal.
However, analysts suggest a Rio Tinto-Glencore combination would likely require addressing the coal question. Reuters Breakingviews noted that "cutting exposure to coal is probably a must for Nagle to find a partner."
The restructuring of Glencore's coal assets under a single Australian unit now makes a potential spin-off or separate listing far simpler. Goldman Sachs analysts have suggested a "Glen-Tinto" separation strategy could create two distinct entities:
- BulkCo: An ASX-listed entity focused on iron ore, coal, and bulk commodities optimized for dividend returns
- BaseMetalsCo: A U.S.-listed copper and base metals company positioned for growth multiples similar to Freeport-mcmoran+3.82%
Ask Fintool AI AgentRegulatory and Execution Risks
A transaction of this magnitude would face significant regulatory scrutiny across multiple jurisdictions:
Antitrust Concerns: The combined entity's dominant positions in iron ore (with BHP, a near-duopoly) and copper would draw intense scrutiny from competition authorities in Australia, the EU, and likely China — a major consumer of both commodities.
Political Sensitivity: Critical minerals have become a matter of national security. The U.S., EU, and other Western nations are actively working to secure supply chains for energy transition metals, which could either support or complicate a deal depending on the perceived strategic implications.
Execution Complexity: Combining two global miners with operations across six continents presents enormous integration challenges. Rio Tinto's dual-listed structure (London and Sydney) adds another layer of complexity.
What to Watch
February 5, 2026: Under U.K. takeover rules, Rio Tinto must either announce a firm intention to make an offer or publicly declare it does not intend to proceed. This "put up or shut up" deadline creates a hard timeline for negotiations.
Coal Separation Strategy: Watch for any announcements regarding the future of Glencore's coal assets. A clear separation plan could remove the biggest obstacle to a deal.
Competitor Responses: BHP, which remains the world's largest miner by market cap, may feel pressure to respond. The company's failed bid for Anglo American in 2024 showed its appetite for transformational deals.
China's Reaction: As the world's largest consumer of iron ore and a major copper importer, China's view of consolidated Western mining giants will be closely watched.
Related Companies: Rio Tinto-3.48% · BHP Group-1.73% · Freeport-mcmoran+3.82% · Southern Copper+5.99% · Newmont+1.19%