Investing.com-- Rio Tinto Ltd (ASX:RIO) Australian shares fell on Friday after reports said the mining giant had held talks with Swiss commodities giant Glencore PLC (LON:GLEN) over a possible merger.
Rio Tinto’s shares fell 1.4% to A$117.930 after falling as much as 1.8% in early Sydney trade.
Bloomberg reported that Rio and Glencore had held early-stage talks over a potential merger, although it was unclear if talks were still ongoing.
Rio Tinto is the world’s second most valuable miner, behind Anglo-Australian rival BHP Group Ltd (ASX:BHP). The company’s market capitalization was just over $100 billion on Friday.
A Rio and Glencore merger is likely to be centered around copper, with their combined copper production expected to rival that of BHP. But it remains unclear whether regulators would allow such a combination, given the two’s relative dominance in the mining industry.
BHP had pursued a failed acquisition of Anglo American (JO:AGLJ) last year for its copper assets, with the red metal expected to see increased demand amid a global push into electrification and clean energy over the coming years.
Recent reports said BHP could try a fresh approach for Anglo- this time with a partner. The world’s biggest miner had unsuccessfully bid for Rio Tinto in 2008.
News of a Rio-Glencore merger also comes amid trying times for the mining industry, as concerns over high interest rates and cooling global growth triggered a sharp drop in commodity prices over the past year.