The global mining industry is watching on as Rio Tinto and Glencore resume merger discussions – driven largely by artificial intelligence’s insatiable appetite for copper.
The renewed talks concern a potential consolidation that would create a combined entity with an enterprise value exceeding US$260bn.
It follows discussions in March 2025, when a previous attempt at a combination ended. Both firms have now confirmed “preliminary discussions” regarding a “possible combination of some or all of their businesses, which could include an all-share merger”.
Rio Tinto, the FTSE 100 company founded in 1873, currently holds an enterprise value of US$162bn (£120bn).
In a formal statement, the company said: “The parties’ current expectation is that any merger transaction would be effected through the acquisition of Glencore by Rio Tinto by way of a court-sanctioned scheme of arrangement. There can be no certainty that an offer will be made or as to the terms of any such offer, should one be made.”
This development follows a period of deal-making in the natural resources sector, notably the US$53bn (£39bn) merger between Anglo American and Teck in September 2025.
Derren Nathan, Head of Equity Research at Hargreaves Lansdown, says: “Last year’s theme of consolidation in the natural resources sector has shown no sign of let-up in the early part of 2026.”
AI infrastructure fuels copper demand
A primary catalyst for the potential merger is surging global demand for copper, directly linked to the expansion of artificial intelligence infrastructure.
Projections from the International Copper Study Group indicate a potential supply shortfall of 10 million tonnes by 2040.
Copper is essential for power distribution and cooling systems in data centres supporting AI infrastructure. As AI models become more sophisticated and widespread, the energy requirements and heat generation from processing have created unprecedented demand for copper-intensive cooling and electrical systems.
A merged Rio Tinto-Glencore entity would control significant copper assets positioned to serve this growing market.
Nathan continues: “A full combination would create a global leader in multiple industrial metals, including iron ore and transition metals such as copper, cobalt and lithium.”
Glencore CEO Gary Nagle says the company’s goal is to become “the biggest copper producer in the world”.
Shifting stance on coal
One notable aspect of the latest talks is the potential shift in the approach to fossil fuels.
In 2024, the Financial Times reported that negotiations faced challenges partly due to disagreements over Glencore’s coal operations. Rio Tinto exited the coal sector in 2018.
However, the political context has changed. Following Donald Trump’s decision in January 2025 to withdraw the US from key United Nations climate treaties and shifts in global energy policies, coal has remained profitable. The FT reportes that Rio Tinto may now be open to retaining Glencore’s coal business, which could allow the company to maintain exposure to both transition metals and fossil fuel assets.
The merger would combine two companies with different operational profiles. Rio Tinto is a mining company with 60,000 employees, while Glencore – established in the 1970s by trader Marc Rich – has a workforce of 150,000 and operates in commodities trading.
Regulatory hurdles ahead
The deal faces extensive regulatory scrutiny. Under UK takeover rules, Rio has until 5 February 2026 to make a formal offer. If it proceeds, it must navigate:
- China’s regulators: As the largest consumer of iron ore and copper, Beijing’s State Administration for Market Regulation (SAMR) may examine the merger’s impact on pricing power
- The Australian Competition and Consumer Commission (ACCC) in Australia: Both firms operate in Western Australia and Queensland, where regulators may scrutinise control over ports, rail and market concentration
- EU review: Brussels may assess the combination’s implications for access to critical raw materials for European manufacturing
As Gary argued recently, the industry needs to consolidate “not just for the sake of size, but also to create material synergies, to create relevance, to attract capital”.
The regulatory response to these discussions, particularly concerning supply security for AI infrastructure buildout, remains to be seen.
