The Role of Coal in Glencore & Rio Tinto's US$260bn Merger

The global mining industry could be on the brink of major transformation as two of the sector's heavyweights, Rio Tinto and Glencore, have resumed merger negotiations.

Glencore's interest in acquiring Rio Tinto dates back as early as the 2008 financial crash, while the most concrete discussions about a merger took place in 2014, though Rio Tinto rejected Glencore's approaches.

Talks were again abandoned in March 2025, though both companies confirmed last week they are in "preliminary discussions" regarding a "possible combination of some or all of their businesses, which could include an all-share merger".

Today, with talks back on, it is thought that a deal would create an entity valued at over US$260bn, positioning it among the most influential resource companies in the entire world.

The role the global energy market is playing in these renewed negotiations is profound, with shifting attitudes and outlooks on coal contributing to the amenability of the organisations to a deal.

Is a deal likely to be agreed?

Rio Tinto, listed on the FTSE 100 and founded in 1873, currently carries an enterprise value of US$162bn.

In a formal statement, the company explains: "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.

"There can be no certainty that an offer will be made or as to the terms of any such offer, should one be made."

The renewed activity follows a string of high-value takeovers in the natural resources space, including the US$53bn (£39bn) merger between Anglo American and Teck in September 2025.

Derren Nathan, Head of Equity Research at Hargreaves Lansdown, notes: "Last year's theme of consolidation in the natural resources sector has shown no sign of let-up in the early part of 2026."

The metals at the heart of the energy transition

At the heart of the deal lies surging demand for energy transition materials – particularly copper. Prices reached over US$13,300 per tonne on 27 January 2026, and the International Copper Study Group forecasts a global shortfall of up to 10 million tonnes by 2040.

Copper underpins modern energy systems, enabling more efficient power distribution and cooling for data centres driving artificial intelligence infrastructure. A combined Rio-Glencore operation would control one of the most substantial portfolios of copper assets worldwide.

As Derren adds: "A full combination would create a global leader in multiple industrial metals including iron ore and transition metals such as copper, cobalt and lithium."

Glencore’s CEO, Gary Nagle, affirms the ambition: the company’s goal is to become "the biggest copper producer in the world".

Rio Tinto and Glencore's evolving stance on coal and fossil fuels

A major point of interest in the current talks is a fresh attitude toward coal. In 2024, merger discussions faltered partly due to disagreement over Glencore’s coal business – a divisive topic given Rio Tinto’s complete exit from coal in 2018.

However, the energy policy environment has changed dramatically. Following US President Donald Trump's 2025 withdrawal of the US from key United Nations climate treaties, coupled with a global recalibration of energy priorities, coal prices and profitability have remained buoyant.

According to the Financial Times, Rio Tinto may now be open to retaining parts of Glencore’s coal portfolio, enabling the combined group to stay exposed to both transition and conventional energy assets.

Together, the two giants bring different strengths: Rio Tinto’s mining and processing footprint with around 60,000 staff, and Glencore’s large-scale commodity trading network, employing more than 150,000 people globally.

Regulatory tests lay ahead

The merger will face a rigorous series of regulatory hurdles. Under UK takeover rules, Rio has until 5 February 2026 to make a formal offer. Should the proposal advance, approval will depend on:

• China’s regulators: As the top consumer of iron ore and copper, China’s SAMR is likely to review how the merger might affect industrial pricing power.

• The Australian Competition and Consumer Commission (ACCC): Both firms have major operations in Western Australia and Queensland, where scrutiny will focus on logistics and market concentration.

• European Union regulators: Brussels may evaluate the deal in light of Europe’s access to critical minerals essential for clean energy manufacturing.

As Gary Nagle recently commented, consolidation in the resources sector is about "not just for the sake of size, but also to create material synergies, to create relevance, to attract talent, to attract capital".

The global regulatory response will ultimately shape how this landmark energy and resources merger unfolds.