A long-expected deal between Rio Tinto (RIO) and Glencore (GLEN) is in the works again, the two companies announced on Thursday, 8 January. A combination would create a dominant player in the copper market largely due to the reserves Glencore has in its portfolio.

The Financial Times reported on Thursday that talks had restarted at the end of 2025, after first taking place earlier in the year.

Glencore said: “Glencore notes recent media speculation and confirms that it is in preliminary discussions with [Rio Tinto] about a possible combination of some or all of their businesses, which could include an all-share merger between Rio Tinto and Glencore.”

The structure would see Rio Tinto making an offer for Glencore, as the larger party. Rio’s shares are close to the all-time high set in 2023 of around 6,300p, giving it a market value of £78bn. Glencore shares are not as strong, trading almost 30 per cent behind the high of 2023, with a market value of £48.5bn.

The dual announcements said there was no certainty that an offer would be made.

Rio Tinto’s shares fell 2.4 per cent on Friday morning in London, while Glencore’s rose 8 per cent. Both companies are trading strongly as the copper price has risen in recent months.

The world’s top mining companies are looking for ways to grow exposure to copper as China’s economy moves on from the boom years that drove high iron ore prices for the past 20 years.

Glencore chief executive Gary Nagle used last month’s capital markets day to put his copper wares on show.

“We have a base business of terrific producing assets and . . . what we believe are the best portfolio of projects in copper to grow this business,” he said.

He also said Glencore could almost double its production of the red metal within a decade to 1.6mn tonnes a year, with the assets currently on hand. Rio Tinto’s current copper output is just under 900,000 tonnes a year.

Copper is in high demand because of its use as electrical wiring, and a lack of major new mines coming to market in recent years.

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BHP (BHP) sought to buy Anglo American (AAL) in 2024 before the smaller company found its own source of new copper tonnes in the merger with Teck Resources (CN:TECK.B). Glencore looked to buy out Teck in 2023 but was rebuffed by the controlling Keevil family and so took over the company’s Canadian coal assets only.

Rio Tinto was seen to be open for deals after a change in management last year. Jakob Stausholm resigned in May amid reports he was pushing back against a possible Glencore deal, leading to a rift with chair Dominic Barton.

New chief executive Simon Trott has said he would simplify the miner at a capital markets day last month, through $5bn-$10bn in asset sales and slowing investment in Stausholm’s preferred growth area, lithium.

RBC Capital Markets analyst Ben Davis said a merger would work for both sets of shareholders. “This deal could be a win-win for both parties, providing Rio with the copper it needs and diluting iron ore exposure while unlocking value for Glencore [shareholders],” he said. RBC’s estimate is that a tie-up would be 60 per cent Rio, with Glencore’s coal assets spun off before completion.

“BHP will undoubtedly be concerned and working out the possibility of an interloping bid,” Davis added.

Glencore got its mining start through another major deal, the merger with Xstrata in 2013. The Swiss trading house came to dominate the arrangement after a late change to the offer. Its trading business would overlap with Rio’s own operations, although is a much larger player in that sector.

“Glencore’s trading arm would sit uneasily within Rio’s operating model, given cultural differences,” said Bloomberg Intelligence analyst Alon Olsha.

“Yet the chance to actively trade Rio’s vast iron-ore volume might be too hard to ignore.”

Additionally, the Glencore mining portfolio is not a perfect match with Rio. The Anglo-Australian company pulled out of coal almost a decade ago, even selling some Australian assets to the Swiss company.

Glencore has also been sceptical of the lithium market, where Rio has invested significantly in recent years, most recently spending almost $7bn on Arcadium for its South American mines.

“It’s unlikely we would get into lithium,” Glencore chief executive Gary Nagle said in 2023. The market has strengthened recently, and Glencore has since developed a lithium trading business, however.

At last month’s capital markets day, Nagle also said coal would stay in the company unless shareholders pushed to revive a planned spinout. “We believe there’s a strong case for particularly high-quality energy coal for many decades to come,” he said.