Two mining giants don’t start merger talks unless something big is at stake. And in this case, one word explains everything: copper.
Rio Tinto and Glencore confirmed recently they’re in preliminary discussions about merging some or all of their businesses. If completed, the deal would create a mining colossus worth roughly $207 billion.
The market’s reaction was immediate and revealing. Rio’s shares dropped nearly 10%, while Glencore’s jumped 5%.
Investors clearly believe Glencore is holding the stronger hand, and that Rio may be paying up to secure future growth.
This isn’t a merger…It’s a copper land grab
Strip away the corporate language and the strategy becomes obvious. Copper supply is tightening, and the miners are scrambling.
Glencore produces about one million tonnes of copper a year and wants to double it. Rio extracts roughly 800,000 tonnes annually.
Together, they’d control around 7% of global copper production – an enormous position in a market already heading toward deficit.
The International Energy Agency (IEA) estimates that existing and planned mines will deliver just 70% of the world’s copper needs by the mid-2030s. That shortfall is structural, not cyclical.
Copper is the backbone of electrification. EVs, solar panels, wind turbines, data centres, and AI infrastructure all depend on it. No copper, no energy transition.
Prices have already told the story. Since March 2020, copper has climbed roughly 150%. Goldman Sachs expects another 30% rise by 2035.
A decade of talking, not buying
Here’s the uncomfortable part for mining giants. They saw this coming – and largely stood aside.
Former Rio leadership dismissed copper deal prices as inflated. BHP echoed similar concerns about overpaying. That discipline avoided disastrous deals, but it also meant missing the cycle’s early, cheaper phase.
Now the catch-up is messy and expensive.
BHP tried twice to buy Anglo American. First with a $75 billion offer, then again at $79 billion. Both bids were rejected outright.
Soon after, Anglo announced a $92 billion merger with Teck Resources, pitched squarely as a copper growth play. That deal removed one of the last major copper-heavy targets from the market. For Rio and BHP, options narrowed overnight.
Why this time might be different
Glencore first approached Rio in late 2024, but the previous CEO had no appetite for mega-deals. That’s changed.
Simon Trott took over as Rio’s CEO in August, reportedly selected for his willingness to consider bolder strategic moves. Under takeover rules, Rio now has until 5 February to make a formal offer or walk away.
That deadline matters. It forces clarity.
Nevertheless, this deal would not be smooth. Glencore is aggressive, opportunistic, and comfortable with risk. Rio is conservative, methodical, and focused on long-life assets.
Glencore also carries baggage – past corruption cases and a large coal business that clashes with Rio’s decarbonisation story.
Integration risk is real, and shareholders know it.
Walking away has a cost too…
Despite the drama, neither Rio nor BHP has been idle.
BHP has lifted copper output 28% in three years, with copper now accounting for 45% of earnings, up from 29%. Rio’s Oyu Tolgoi expansion in Mongolia is turning into a top five global copper mine. Copper now contributes 19% of group earnings, up from 13%.
Progress, yes. But still not dominance.
February 5 is the line in the sand. Either Rio makes a formal move, or it steps back.
Whether this deal happens or not, the message is unmistakable: the era of cheap copper assets is over. When the world’s biggest miners start circling each other, it’s because supply is running out, and time is no longer on their side.
For investors, it’s a signal that the copper arms race has entered its most expensive phase. To stay on top of the investment opportunities in copper and other critical resources, follow South African Investor.
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