ASX-listed Rio Tinto Limited (AU:RIO) is reportedly exploring a landmark merger deal with FTSE100-listed miner Glencore (GB:GLEN). According to Bloomberg, both companies are in early-stage discussions on a potential merger, that could lead to the mining industry’s largest-ever deal. Bloomberg also estimates that the merger could be worth £150 billion, however, no financial terms have been officially disclosed.
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Following the news, Rio’s shares on ASX fell by 0.73% on Friday.
Mining Industry Faces Shake-Up as Major Deals Emerge
Rio Tinto and Glencore are among the leading mining companies in the world, with diverse portfolios covering a wide range of commodities. Previously, Rio and Glencore reportedly held merger talks in October 2024, but no deal was reached. Overall, experts believe that a potential Rio and Glencore merger will be focused on copper. Interestingly, global miners are evaluating opportunities to strengthen their position in metals like copper, which are needed for the energy transition.
Last year, BHP (AU:BHP) was unable to finalize a deal with rival Anglo American (GB:AAL) after weeks of negotiations. BHP aimed to strengthen its copper portfolio through the acquisition, however, the companies disagreed repeatedly over the deal’s structure.
Similarly, Rio is looking to boost its focus on commodities like lithium and copper to offset declining iron ore demand from China. In 2024, Rio agreed to acquire lithium producer Arcadium Lithium (AU:LTM), with the deal recently approved by U.S. authorities on national security grounds.
Rio Reports Strong Copper Performance in Q4
Yesterday, Rio reported a 26% year-over-year increase in copper production for Q4, reaching 202,000 tonnes, well above the forecast of 182,000 tonnes. For 2024, total copper production rose 13% to 697,000 tonnes, driven by growth at Oyu Tolgoi and Escondida mines.
Looking ahead, copper output is expected to range from 780,000 to 850,000 tonnes.
Is Rio Stock a Good Buy Now?
According to TipRanks, RIO stock has received a Moderate Buy rating based on a total of 10 recommendations, of which six are Buy. The RIO share price forecast is AU$129.3, which is 9% above the current trading level.
