Rio Tinto and Glencore resume talks on $260 billion mega-merger

Rio Tinto And Glencore have confirmed they are resuming negotiations on a potential $260 billion mega-deal that could create the world’s largest mining company.

“Rio Tinto and Glencore have engaged in preliminary discussions regarding a possible combination of all or part of their businesses, which could include a merger of all shares between Rio Tinto and Glencore,” Rio Tinto, the larger of the two companies, said in a statement early Friday morning.

“The parties currently expect that any merger transaction will be effected by the acquisition of Glencore by Rio Tinto by way of a Court-sanctioned plan of arrangement.”

Rio Tinto’s Australian-listed shares fell 6.3% on Friday.

CNBC has contacted both companies for additional comment. Rio Tinto said it had until February 5 at 5 p.m. London time (12 p.m. ET) to either announce its firm intention to make a bid for Glencore or announce it did not intend to make an offer.

Rio Tinto and Glencore have discussed a merger at the end of 2024, but talks have broken down over issues such as valuation and the future of Glencore’s coal mines.

Last August, Rio Tinto CEO Simon Trott announced a reorganization of the company. Trott has promised to cut costs and unlock up to $10 billion from its asset base by focusing the company on three main product groups: iron ore, aluminum, lithium and copper.

A deal between Rio Tinto and Glencore would add to recent M&A activity in the mining sector, following Anglo American and Canada’s Teck Resources agreed merge in a $66 billion deal last September. The merger is expected to create one of the world’s five largest copper producers.

The resumption of negotiations between Glencore and Rio Tinto has also resulted in growing demand for copper, with prices of the red metal hitting a record high of $13,000 per tonne this week.