Aluminum Corporation of China, a major shareholder in Rio Tinto, is set to support the mining giant’s potential takeover of Glencore, as it would give the Chinese firm additional exposure to copper supply, sources with knowledge of the matter told Bloomberg on Monday.
Aluminum Corporation of China, also known as Chinalco, holds 14.55% of Rio Tinto’s London-listed shares, and any potential deal would need the approval of both the key Chinese shareholder and the Chinese authorities.
Rio Tinto Group and Glencore Plc earlier this month confirmed they have been engaging in preliminary discussions about a possible combination of some or all of their businesses, which could include an all-share merger between Rio Tinto and Glencore.
The parties’ current expectation is that any merger transaction would be effected through the acquisition of Glencore by Rio Tinto by way of a Court-sanctioned scheme of arrangement.
A potential merger would rank among the largest transactions ever attempted in the mining sector. The combined company would be valued at about $260 billion and would control a broad mix of iron ore, copper, and other industrial metals at a point when supply growth across several markets is slowing.
A deal would redraw the global map of mining as Rio Tinto’s iron ore business and Glencore’s copper portfolio and global trading operations would cover both production and distribution at scale – a combination few miners can match.
The other major global miner, BHP Group, has ruled out a competing bid, for now.
Following the January 8 confirmation of the preliminary Rio-Glencore talks,
Rio Tinto will have until February 5, 2026 to either announce a firm intention to make an offer for Glencore or announce that it does not intend to make an offer.
If a tie-up is agreed, China is likely to require asset sales as it is concerned about concentration of copper production and trade, analysts and legal experts told Reuters last week.
By Tsvetana Paraskova for Oilprice.com
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