Rio Tinto and Glencore Discuss Merger Plans, Focusing on This Key Metal
Bloomberg reported that Australian mining giant Rio Tinto and Swiss commodity trader and miner Glencore are in discussions about a potential merger, having recently conducted preliminary talks. If an agreement is reached, this would mark the largest deal in the history of the commodity industry, reshaping the global mining market.
Rio Tinto is the world’s second-largest mining company with a market capitalization of approximately $103 billion, while Glencore’s market value stands at $55 billion. If these two companies merge, they would surpass the long-standing industry leader BHP Group, which has a market value of around $126 billion, creating a new industry giant.
Furthermore, this potential merger between the two industry giants would focus on the crucial metal, copper.
Challenges for the Big Five in Mining
In recent years, the five major mining giants—BHP, Rio Tinto, Glencore, Vale, and Anglo American—have faced significant downturns. According to the MINING.COM Top 50 ranking, these companies collectively lost 25.3% or $119.7 billion in market value in 2024 due to falling copper and iron ore prices.
Historically, these companies consistently held the top five positions, but now their stocks comprise only 28% of the index, down from 38% at the end of 2022. Vale was the worst-performing company in 2024, with its market value plummeting 44.9% to $37.7 billion, pushing it out of the top ten, replaced by Indonesian newcomer Amman Mineral. Although Anglo American saw some growth last year, it also fell out of the top ten.
Could Copper Be the Lifeline?
In 2024, copper prices reached historical highs, and while the price surge did not last, it initially seemed poised to bring substantial profits to the Big Five mining companies. However, as green energy transitions continue, long-term demand for this key metal is expected to drive price increases in 2025.
Although Rio Tinto’s profits are primarily derived from its iron ore business, the company is intensifying its focus on copper. In its financial report released last December, Rio Tinto projected its copper output to rise to between 780,000 and 850,000 tonnes in 2025, driven by a 50% increase in production from its Mongolian assets. By 2030, Rio Tinto’s copper production is anticipated to reach 1 million tonnes, positioning it as a major industry player.
Similar to last year’s BHP attempt to acquire Anglo American, the potential Rio Tinto-Glencore merger is also centered on copper. Combined, the two companies’ copper production would rival that of BHP. Glencore’s copper output is expected to be around 1 million tonnes in 2024, with Rio Tinto’s target capped at 720,000 tonnes. Additionally, merging with Glencore would grant Rio Tinto a stake in Chile’s Collahuasi copper mine.
Amid the global mining giants’ race to secure copper assets, increased production and mergers have become the industry’s main themes. In the context of the future energy transition, securing copper, the “golden key,” will enable companies to maintain a competitive edge in the new market environment. This competition is not just a matter of business rivalry but also an essential component of national strategic security.
Base Metals
Clean Energy
Copper
M&A