Rio Tinto and Glencore have opened talks on a potential merger that would form the worlds largest mining company, in a move that could redraw the global commodities landscape and intensify scrutiny of Londons role as a hub for resources giants.

In brief statements released early on Friday, Swiss-based Glencore confirmed it is in merger discussions with British-Australian rival Rio Tinto, while Rio said it is considering an all-share transaction for Glencore under UK takeover rules. Under those rules, Rio Tinto has until 5 February to make a formal offer or walk away, unless the deadline is extended by the Takeover Panel.

A new mining supermajor

At Thursdays close, Rio Tinto was valued at about $148bn, with Glencore worth roughly 48bn, or $64bn, implying a combined group that would eclipse current industry leader BHP, which has a market capitalisation of around $161bn. A merged RioGlencore would become the worlds biggest publicly listed miner by value, bringing together a vast portfolio of iron ore, copper, coal, aluminium, nickel and trading operations.

Glencore shares surged 11% in early London trading following confirmation of the talks, while Rio Tintos stock slipped around 2% as investors weighed the risks of executing and integrating such a large deal. The market reaction reflects expectations that Glencore shareholders could command a premium in any all-stock combination, while Rio investors assess potential dilution and regulatory hurdles.

Copper, AI and the energy transition

The proposed tie-up comes as metals prices, particularly copper, have rallied sharply on the back of demand linked to artificial intelligence infrastructure, electric vehicles and grid electrification. The front-month copper contract has climbed about 36% over the past 12 months, underscoring the strategic value of large-scale copper reserves and processing capacity for diversified miners.

Both Rio Tinto and Glencore hold significant copper assets across South America, Africa and Australasia, and a merger would create a dominant player in a metal widely seen as critical to the energy transition. Analysts are likely to focus on how competition authorities view that concentration, alongside existing concerns over market power in thermal and metallurgical coal.

Regulatory and political scrutiny

An all-share deal of this scale would trigger intensive regulatory review in multiple jurisdictions, including the UK, EU, Australia and possibly China, given the geographic spread of mining, smelting and trading operations. UK takeover rules already frame the timetable for any formal offer, but competition and foreign investment regulators would have substantial leverage over the shape and pace of any transaction.

In London, the transaction would be seen as a test of the Citys ability to host and finance global mining champions at a time when policymakers are sensitive to both geopolitical risk in critical minerals and the environmental footprint of large resource groups. Any combination is likely to attract political interest over jobs, tax receipts and governance standards, particularly around coal and other high-emission assets.

Implications for London and global mining

If completed, a RioGlencore merger would reinforce Londons role as a core listing venue for diversified miners and trading houses, even as some international groups have shifted focus to other financial centres. It would also intensify competitive pressure on BHP and other rivals to scale up or reshape their portfolios in response to rising demand for transition metals and AI-related infrastructure.

For investors in UK markets, the talks highlight renewed dealmaking appetite in the sector after several years of relative restraint, amid volatile commodity cycles and heightened ESG scrutiny. While there is no certainty that negotiations will lead to a formal offer, the prospect of creating a new mining supermajor has already jolted Londons resources sector and set the stage for a defining contest over the future structure of the global mining industry.