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A global scramble for copper and other metals is driving the industry’s return to big acquisitions

Rio Tinto and Glencore GLEN -2.32%decrease; red down pointing triangle are in talks about a deal that would create the world’s largest mining company with a market value of more than $200 billion, as a scramble for copper and other metals drives an industry return to big acquisitions.

Glencore and Rio Tinto separately confirmed that talks are under way over an all-share deal, revisiting a tie-up that was first discussed around a year ago when the U.S. and other countries began reshaping supply chains for metals and minerals essential to industries such as defense, automaking and semiconductor chips.

The expectation is that Rio Tinto would buy Glencore by way of a court-sanctioned scheme of arrangement, the companies said.

It underscores a shift in thinking among mining executives, who had grown leery about doing big deals after companies overpaid for assets more than a decade ago just as a China-led boom in commodities began to lose steam. Investors at the time pressured companies including Rio Tinto and Glencore to focus on returns, including higher dividends.

“Mining megamergers are back,” Jefferies analysts wrote in a note to clients.

Interest in dealmaking has rekindled as executives and investors worry that their pipeline of new projects isn’t big enough to sustain profits and power share-price growth on its own. The biggest miners had largely anchored their businesses around the production of iron ore and coal, two bulk commodities that were needed by China during its early industrialization.

That focus left many of these miners light on production of copper, which has become a hot commodity as investors bet on rising demand from the roll out of data centers that support the adoption of artificial intelligence and cloud computing.

Doing deals can help miners increase their production faster than building new mines, which typically take years given permitting hurdles and are at risk of cost overruns.

BHP Group, the world’s No. 1 miner by market value, recently made a new bid to acquire Anglo American, a proposal that was rebuffed by its rival. Anglo has agreed to merge with Canada’s Teck Resources in a deal signed off by shareholders of both companies late last year.

Glencore had previously itself bid for Teck and ended up acquiring its steelmaking coal business in 2024.

“BHP wanted Anglo’s copper assets,” Jefferies said. “Anglo wanted and we think is likely to get Teck’s copper assets. And Rio considered a transaction with Glencore, presumably to get leverage to Glencore’s operating copper assets and copper growth projects.”

Glencore owns a stake in the Collahuasi mine in Chile, one of the world’s richest copper deposits, as well as several other copper mines, smelters and refineries globally. Rio Tinto’s copper business includes the Kennecott mine in Utah and a long-delayed project in Arizona that could supply a quarter of U.S. demand of the industrial metal when it starts up.

U.S. copper futures surged to a record this week, reflecting expectations that demand for the metal will rise and supply will be constrained. Data centers contain a lot of copper and need a huge amount of copper-intensive power infrastructure to operate. Electric vehicles and wind farms also use copper in much greater quantities than gasoline-powered cars and coal-fired power plants.

Meanwhile, there have been fewer big discoveries in recent years and resources are deeper underground than ever before. Most of the additional copper resources found in 2025 came from known deposits, according to S&P Global Market Intelligence. It estimates an average 17 years to get a new copper discovery into production.

Rio Tinto’s willingness to discuss a deal with Glencore comes just months after it overhauled its leadership team. In an early memo to employees, Rio Tinto’s new chief executive, Simon Trott, promised “fundamental” changes at a company where he previously ran the iron-ore business. Trott last month outlined plans to cut costs and sell assets.

“We are surprised that Rio has engaged with Glencore on the combination, given the message to investors has been emphasizing ‘simplicity,’” said Prasad Patkar, head of qualitative investments at Sydney-based Platypus Asset Management, which doesn’t have a stake in either company.

Under U.K. takeover rules, Rio Tinto has until Feb. 5 to confirm whether it will make an offer for Glencore or walk away for six months. Its market value is about $145.32 billion and Glencore has a market capitalization of about $67.44 billion, according to FactSet.

Glencore’s American depositary receipts rose by 8.8% in New York. Rio Tinto shares were roughly 6% lower by midafternoon in Sydney. Rio Tinto is dual listed in Australia and the U.K.

Jefferies said one possibility is that Rio Tinto and Glencore merge their iron-ore and coal businesses as an Australian-listed company, and then separate their base-metals assets under a different entity. But that kind of deal could be difficult to structure and come with a big tax burden, they said.

Another possibility is that Glencore offloads its coal business and then sells itself to Rio Tinto.

Rio Tinto, which exited the coal industry in 2018, has sought to diversify away from iron ore, which accounted for almost 80% of its earnings as recently as 2024. A combined company without coal would make most of its money from copper, followed by iron ore and aluminum, Jefferies said.

“We would not expect Glencore to get taken out in a nil-premium merger,” Jefferies said.