Glencore and Rio Tinto are at it again – and it seems the markets smell action

Many of the old challenges remain but there are a number of reasons why this time a deal of some kind could be possible

• Mining firms Rio Tinto and Glencore restart $260bn merger talks

Here we go again. A combination of Rio Tinto and Glencore has been talked about for years and the duo held aborted negotiations at the end of 2024. With the global mining industry in deal-making mode - frenzies come along every 15 years or so - the idea of RioGlen or GlenTinto was due another whirl. On Friday, the two FTSE 100 companies said they were in preliminary discussions" about a possible combination of some or all of their businesses". A full-blown tie-up would be worth about $260bn (120bn), including debt.

Many of the old challenges to a deal haven't gone away. Glencore's roots lie in trading commodities; Rio is a traditional pure miner, so the fit is culturally imperfect. Does Rio, which got out of coal as long ago as 2018 under investor pressure, really want to go back in by adding Glencore's significant assets in that area? Reports suggested it is prepared to do so. But, if not, should coal be hived off beforehand? Should Glencore's trading operation go with it?