A decade after Rio Tinto rejected a proposal from Glencore, the two mining giants recently engaged in months-long discussions about a potential merger. This renewed interest in consolidation reflects a changing landscape in the mining industry, driven by dealmaking fever and the push towards energy transition metals like copper and lithium. Both companies have undergone transformations, Rio Tinto overcoming its past dealmaking anxieties and Glencore shifting away from its trading-focused model. Industry analysts predict a wave of consolidation as major miners seek to secure their position in a rapidly evolving market.
When Glencore Plc proposed a combination with Rio Tinto Group a decade ago, the larger company turned it down after just a few days. News this week that the two spent several months in negotiations in the second half of last year shows how the sands have shifted, just as mega-deal fever sweeps the global mining industry.
After more than a decade of sitting on the sidelines, the biggest miners have made an enthusiastic return to dealmaking as they jostle for position and rush to bulk up in energy transition metals like copper and lithium. For Rio, the key moment came when its biggest rival, BHP Group, last year sent shockwaves through the industry with a proposal to buy Anglo American Plc.
Rio has finally moved past the fear of big deals that has haunted it since its disastrous 2007 purchase of Canadian aluminum maker Alcan, and Chairman Barton has been a key driver of the shift in approach. The former Canadian diplomat and McKinsey & Co. global managing partner has insisted the company be more open-minded when it comes to deals, saying publicly its reluctance has led to missed opportunities.
For more than a decade, big M&A has been a taboo subject, the legacy of its disastrous Alcan purchase. Often described as the worst deal in mining history, it soured as aluminum demand slid during the global financial crisis and Chinese supply flooded the market. It forced Rio to take almost $30 billion in writedowns and ultimately cost the CEO at the time his job.
Some Glencore veterans say the company is now hard to recognize — with what they say is less of an entrepreneurial culture, a lower appetite for risk, and a greater deference to the company’s in-house lawyers.
Mining MERGERS AND ACQUISITIONS MINING INDUSTRY RIO TINTO GLENCORE COPPER LITHIUM ENERGY TRANSITION
United States Latest News, United States Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Mining stocks rise after reports of Glencore, Rio Tinto merger talks; European markets resume rallyEuropean markets opened in positive territory on Friday, setting the region’s stocks up for a weekly rise.
Read more »
Rio Tinto and Glencore in Talks for MergerAustralian mining giant Rio Tinto and Swiss commodities trader Glencore have reportedly held early-stage talks about a potential merger. While it's unclear if the discussions are still ongoing, a combination would create a copper powerhouse rivaling BHP, the current market leader. The news comes amidst a challenging period for the global mining industry, with traditional giants like BHP, Rio Tinto, Glencore, Vale, and Anglo American facing declining valuations and pressure from fluctuating commodity prices.
Read more »
Rio Tinto to form new lithium unit after Arcadium buyNo 1 source of global mining news and opinion
Read more »
Arcadium shareholders approve sale to Rio TintoNo 1 source of global mining news and opinion
Read more »
Activist Palliser pushes Rio Tinto to leave London exchangeNo 1 source of global mining news and opinion
Read more »
Palliser Capital Pushes Rio Tinto to Consolidate Listing in AustraliaActivist investor Palliser Capital is demanding a review of Rio Tinto's dual listing, aiming to consolidate it in Australia.
Read more »