Mining giants plan £130bn mega-merger to drive net zero commodity growth
Two of the world’s biggest miners are planning a £130bn mega-merger to drive net zero commodity growth.
Rio Tinto and Glencore have been discussing combining their businesses in the biggest deal in mining industry history, people familiar with the matter told Bloomberg.
Talks between the two London-listed companies are said to be at an early stage. The deal will create the world’s largest mining company, overtaking long-time industry leader BHP, valued at $126bn (£103bn).
Rio Tinto It is the second largest mining company in the world, valued at around $103 billion. Glencore It is valued at $55 billion. Therefore, the combined group is expected to be worth an estimated $158 billion.
A Glencore spokesman said the company does not comment on market rumors or speculation. Rio Tinto declined to comment.
Any contract It may hinge on the support of swashbuckling businessman Evan Glasenberg, who received billions from the Glencore listing in 2011.
Mr. Glasenberg He will step down as CEO of Glencore in 2021 but still holds a 10pc stake in the company. During his tenure as CEO,
The support of Qatar and China will also be crucial. Qatar is one of Glencore’s largest shareholders, with an 8.5% stake in China’s state-owned aluminum company Chinalco, the largest investor in Rio Tinto.
The mining industry has been scrambling to reach agreements in recent years in response to global initiatives towards zero net carbon emissions.
A wholesale reorganization of the planet’s energy system and industries is expected to increase demand for certain commodities, such as copper for electrical transmission and lithium for batteries.
However, building new mines to obtain these materials is very expensive and requires a large amount of credit and investment. Rio Tinto has been positioning itself to take advantage of the expected copper boom.
In the year It began underground copper production in 2023 at its Oyu Tolgoi mine in Mongolia, and is forecast to produce 500,000 tonnes of copper per year between 2028 and 2036.
A tie-up with Glencore would allow Rio Tinto to acquire a rival’s 44pc stake in the Colahuasi mine in Chile, which has the world’s largest copper reserves.
The merger will help Rio Tinto expand its business and overcome its slump in China. The Australian-based business is still based on iron ore and is highly exposed to China.
Construction growth there has hit a snag amid a long-running property crisis, while the election of Donald Trump in the US could spell more trouble for China’s faltering economy.
