According to reports, Glencore Xstrata chief executive and mining billionaire tycoon Ivan Glasenberg is in the early phase of putting together a takeover offer to his giant rival Rio Tinto. It would be considered as one of the biggest deal in the industry making a combined company worth $160 billion (£99 billion).
The deal comes over a year after Glencore completed a merger with Xstrata, a takeover that created a business then worth $66 billion. It would easily leapfrog BHP Billiton to become the world's largest mining company.
According to the Independent, Glasenberg has reportedly proposed a deal to Rio Tinto's Chinese shareholders. Mining industry executives pointed to Glasenberg's noted persistence on whether the deal will push through or not.
China is believed to be concerned on the Glencore/Xstrata merger, demanding and getting the divestment of the Las Bambas copper mine in Peru as the price of its agreement.
The story that was first revealed through Bloomberg said no talks had been held formally between Glencore and Rio, although Mr Glasenberg has made Rio bosses, led by chief executive Sam Walsh, aware in private that he would be keen.
The takeover would give Glencore access to the Rio Tinto's vast resources. This includes the possibility of exploiting the iron ore in Guinea. After years of arguing with mining tycoon Beny Steinmetz, Chinalco and Rio then agreed on a deal to explore one of the world biggest untapped iron resource.
According to Forbes, "The key difference is iron ore. Rio Tinto is one of the world's biggest and lowest cost miners of the steel-making material. Glencore deals in iron ore through its commodity trading operations and is planning to develop a mine in Africa but that's all."
A Rio-Glencore merger would create a business with market-leading positions in iron ore, copper, nickel, zinc and coal and be, as Bernstein says, "the most diversified mining company on the planet."
