(Reuters) – Rio Tinto, and Glencore have held early-stage talks about combining their businesses, Bloomberg News reported on Thursday, citing people familiar with the matter.
The potential merger between the two mining heavyweights, if successful, would be the industry’s largest deal and create a combined company with a market value of around $158 billion, surpassing top miner BHP’s $126 billion valuation.
The report said it was unclear whether the talks were still live.
Both the companies declined to comment. Rio Tinto’s U.S.-listed shares fell 2.5%, while Glencore stock was up 7.4%.
A source familiar with the matter told Reuters that Glencore approached Rio late last year, but the talks were brief and no longer active.
This would not be the first time the two companies have considered combining. In 2014, Rio Tinto rejected a merger offer from Glencore that would have allowed the combined company to surpass BHP as the world’s biggest miner.
The latest discussions come as iron ore demand in China, the world’s largest consumer of the commodity, takes a hit from a slowdown in the country’s debt-laden property sector.
Consolidation has also picked up in the mining industry as companies race to secure supplies of metals essential for electric-vehicle batteries and the clean energy transition.
Rio last year agreed to buy U.S.-listed lithium producer Arcadium for $6.7 billion as the world’s largest producer of iron ore sought to transform itself into a processor of high-end, low-carbon raw materials.
Still, Rio Tinto faces challenges with depleting primary mines and is resorting to increased production of lower-grade iron ore to maintain output levels.
These challenges have hit Rio Tinto’s performance, with the company reporting its lowest annual iron ore shipments in two years on Thursday.
(This story has been corrected to say Glencore’s stock was up 7.4%, not down 7.4%, in paragraph 4; and to remove the reference to Glencore being an iron-ore miner in paragraph 2)
(Reporting by Roushni Nair, Urvi Dugar and Shivangi Lahiri in Bengaluru, additional reporting by David French and Clara Denina; Editing by Alan Barona and Devika Syamnath)
