Glencore’s copper pitch: buy in or buy me
Miner’s assets and prospects strengthen its hand for M&A — a game it knows better than anyone
The way to get ahead in mining nowadays is to have a lot of copper. Two companies laid out their stall to investors this week by pointing to their prospects in this space. One of them, however, pushed the pedal to the metal harder — in a way that feels like a pitch for future mergers and acquisitions.
Rio Tinto’s capital markets day was simple and prudent. It confirmed its target of growing production by 3 per cent a year until 2030. But its copper production next year will be 5 per cent below analysts’ estimates. Compare and contrast with Glencore, which may have cut next year’s targets but also pledged to grow copper production by 9.4 per cent a year to 1.1mn tonnes in 2029, far above expectations, and hit 1.6mn tonnes by 2035 to become one of the world’s largest copper producers.
Most of Glencore’s plan relies on expanding existing mines, with one new project in the mix, which should make its task a bit more manageable. That’s important given the company’s empire was stitched together through acquisitions, trading prowess, logistics and marketing — not starting mines from scratch. What it does possess, however, is a portfolio of stakes in some blue-chip copper assets: 44 per cent of the Collahuasi mine, in which competitor Anglo American also holds a stake, and 34 per cent in the Antamina mine, which it shares with BHP and Teck Resources.
Whether Glencore can deliver on its new strategy of in-house growth may not matter as much as selling the dream. Its assets and prospects strengthen its hand for M&A — a game it knows better than anyone. Glencore is one of the sector’s most persistent suitors, even if its courtships often end in rejection. It floated a merger with BHP in 2022, launched a failed $23bn hostile bid for Teck Resources in 2023 before settling for its steelmaking coal arm, weighed a bid last year for Anglo and sounded out Rio Tinto on a combination in October 2024.
Investors seem to have bought into its prospects: the company’s shares rose 6 per cent on Wednesday, giving it a market value of £45bn, roughly 30 per cent above where it was six months ago and more than offsetting its weakness earlier this year. Indeed, as a multiple of next year’s earnings, Glencore is now valued at a premium to both Rio and BHP.
The art of negotiation depends on having alternatives. Wednesday’s copper extravaganza looks strategic. Glencore’s message, to investors and to its peers, is clear: if you want copper, this is where you should get it.