LONDON – British-Australian miner Rio Tinto said on Thursday that it was ending talks to merge with smaller Swiss resources giant Glencore, a deal that would have created the world’s largest mining firm. “Rio Tinto has determined that it could not reach an agreement that would deliver value to its shareholders,” the group said in a statement. Together, the two companies would have been valued at around US$260 billion. Glencore said separately that the terms offered by Rio Tinto “significantly undervalued Glencore’s underlying relative value,” including an inadequate valuation of its copper business. 

“The parties were unable to reach an agreement on the terms of a combination,” which included Rio Tinto keeping its chairman and chief executive officer (CEO) as heads of the combined company, Glencore said in a statement. Both stocks ended lower on London’s FTSE 100 index, with Glencore sliding seven percent and Rio Tinto down 2.6%. The pair said last month they were in preliminary discussions to combine some or all of their businesses in an all-share deal. That came after early merger talks between the pair had failed more than a year ago. 

“It had been thought that Rio Tinto’s new CEO might… succeed in getting the mega merger over the line,” said AJ Bell head of financial analysis Danni Hewson. 

“But with so much at stake and shareholders to appease, it seems ultimately the magic number could not be found, at least not right now,” she added. Before news of the merger plans, in December Rio Tinto’s new chief executive, Simon Trott, unveiled plans to revamp the British- Australian mining giant as it steps up production of copper. Combining forces would have given the two firms greater leverage to purchase copper, a metal in growing demand as countries expand electrical networks to harness renewable energy. 

“There’s been considerable momentum in the mining sector as demand for metals like copper ramps up,” Hewson noted. 

The coveted metal is also used in electric-vehicle batteries and data centres for artificial intelligence. Surging demand has pushed copper prices to record high in recent times. Glencore chief executive Gary Nagle has vowed to make the group one of the world’s largest copper producers, with its extensive stakes in copper mines across the Democratic Republic of Congo, Australia, and South America. Rio Tinto is heavily focused on Australia, the leading exporter of iron ore, which mostly goes to China for steel production. 

Trott, who in late August stepped up from his role as head of Rio Tinto’s iron ore division, has upgraded the group’s 2025 copper production forecast to as much as 875 000 tonnes, up from up to 850 000. The CEO also identified lithium as a key growth area. The metal is in strong demand thanks to its use in electric vehicles and other clean energy technologies. 

Analysts had flagged cultural differences between the two firms, with Rio Tinto having exited its coal assets and Glencore retaining its fossil fuel assets. Glencore announced in August that it had decided against spinning off its coal business, saying its shareholders viewed the coal business as a cash-generating asset. 

Emphasising moves by mining giants to consolidate, Australian resources giant BHP ended a renewed attempt last year to buy British rival Anglo American, a deal that would have created the world’s largest copper miner. -Nampa/AFP