Rio Tinto Ltd (ASX: RIO) shares could overtake Aussie mining rival BHP Group Ltd (ASX: BHP) in terms of market dominance in 2025.
That is if the rumoured potential merger between the S&P/ASX 200 Index (ASX: XJO) mining stock and Glencore PLC comes to fruition.
With a recent market cap of some US$103 billion, Rio Tinto counts as the world's second-largest miner.
BHP still ranks as number one, with a market cap of around US$126 billion. While Glencore has a market cap of approximately US$55 billion.
Should Rio Tinto shares come to encompass Glencore's assets, the combined company would eclipse BHP as the world's biggest miner.
But is this deal really going to happen?
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Will Rio Tinto shares combine with Glencore in 2025?
The answer appears to be "maybe".
Citing people familiar with the matter who wished to remain anonymous, Bloomberg reported the two mining giants are in early-stage discussions to combine their companies in what would be the largest mining deal in history.
Among the potential benefits for Rio Tinto shares are Glencore's copper assets. That includes Glencore's flagship Collahuasi mine in Chile, reported to have one of the largest copper reserves in the world.
With demand for the red metal expected to post strong, ongoing growth over the coming decade amid limited new supplies, miners worldwide are seeking to expand their copper footprint.
According to Bloomberg Intelligence analyst Grant Sporre, a combination of Glencore and Rio Tinto shares would result in the world's number one copper producer.
But there are many hurdles to cross before a deal goes through. Atop the range of regulatory issues, Rio Tinto has moved away from coal mining while Glencore maintains a strong focus on the fossil fuel.
In March 2018, Glencore agreed to buy Rio Tinto's interests in the Hail Creek coal mine and the Valeria coal development projects in Queensland for $1.7 billion.
Rio Tinto and Glencore have not yet commented on the merger rumours.
A new mining behemoth on the horizon?
Commenting on the potential combination of Rio Tinto shares with Glencore, Josh Gilbert, market analyst at eToro, said:
Today's news of a potential merger between Rio Tinto and Glencore is significant as it would mark the largest deal in mining history. These talks are still early, but if successful, would create a mining behemoth.
But investors shouldn't put the cart ahead of the horse.
"There will be plenty of hoops to jump through," Gilbert cautioned.
Pointing to the potential uplift in mergers and acquisitions in 2025, he noted, "There were early signs that M&A activity would pick up this year, after BHP went after Anglo American (LSE: AAL), while Rio Tinto acquired Arcadium Lithium (ASX: LTM) at the end of 2024."
Addressing the rationale for a merger between the two global miners, Gilbert added:
Ultimately, the race to secure key commodities in the energy transition is ongoing. Commodities such as copper will play a role in renewable energy, energy storage, and upgrading electrical grids worldwide, particularly with the rise of AI and the energy it demands.
Glencore has one of the richest copper deposits in the world, which is why this deal makes sense for Rio Tinto. The move would also allow Rio Tinto to reduce its reliance on profitability from iron ore when China's previously booming real estate sector has dwindled.
The rumoured merger has yet to lift Rio Tinto shares today, down 0.64% in late morning trade at $118.85 apiece.
