Why merger mania is coming to the fore in the mining industry

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5 months ago

January 20, 2025

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The Rio Tinto Group logo atop Central Park tower, which houses the company’s offices, in Perth, Australia, on Friday, Jan. 17, 2025.

Bloomberg | Bloomberg | Getty Images

The mining sector appears poised for a frantic year of dealmaking, following market speculation over a potential tie-up between industry giants Rio Tinto and Glencore.

It comes after Bloomberg News reported Thursday that British-Australian multinational Rio Tinto and Switzerland-based Glencore were in early-stage merger talks, although it was not clear whether the discussions were still live.

Separately, Reuters reported Friday that Glencore approached Rio Tinto late last year about the possibility of combining their businesses, citing a source familiar with the matter. The talks, which were said to be brief, were thought to be no longer active, the news agency reported.

Rio Tinto and Glencore both declined to comment when contacted by CNBC.

A prospective merger between Rio Tinto, the world’s second-largest miner, and Glencore, one of world’s largest coal companies, would rank as the mining industry’s largest-ever deal.

Combined, the two firms would have a market value of approximately $150 billion, leapfrogging longstanding industry leader BHP, which is worth about $127 billion.

Analysts were broadly skeptical about the merits of a Rio Tinto-Glencore merger, pointing to limited synergies, Rio Tinto’s complex dual structure and strategic divergences over coal and corporate culture as factors that pose a challenge for concluding a deal.

“I think everyone’s a bit surprised,” Maxime Kogge, equity analyst at Oddo BHF, told CNBC via telephone.

“Honestly, they have limited overlapping assets. It’s only copper where there is really some synergies and opportunity to add assets to make a bigger group,” Kogge said.

Global mining giants have been mulling the benefits of mega-mergers to shore up their position in the energy transition, particularly with demand for metals such as copper expected to skyrocket over the coming years.

A highly conductive metal, copper is projected to face shortages due to its use in powering electric vehicles, wind turbines, solar panels and energy storage systems, among other applications.

Oddo BHF’s Kogge said it is currently “really tricky” for large mining firms to bring new projects online, citing Rio Tinto’s long-delayed and controversial Resolution copper mine in the U.S. as one example.

“It’s a very promising copper project, it could be one of the largest in the world, but it is fraught with issues and somehow acquiring another company is a way to really accelerate the expansion into copper,” Kogge said.

“For me, a deal is not so attractive,” he added. “It goes against what all these groups have previously tried to do.”

What's behind the looming copper shortage

Last year, BHP made a $49 billion bid for smaller rival Anglo American, a proposal which ultimately failed due to issues with the deal’s structure.

Some analysts, including those at JPMorgan, expect another unsolicited offer for Anglo American to materialize in 2025.

M&A parlor games

Analysts led by Dominic O’Kane at JPMorgan said the bank’s “high conviction view” that 2025 would be defined by mergers and acquisitions (M&A), particularly among U.K.-listed miners and global copper companies, was coming to fruition just two weeks into the year.

The Wall Street bank said its own analysis of the mining sector found that the current economic and risk management environment meant M&A was likely preferred to the building of organic projects.

Analysts at JPMorgan predicted the latest speculation would soon thrust Anglo American back into the spotlight, “specifically the merits and probability of another combination proposal from BHP.”

Prior to pursuing Anglo American, BHP completed an acquisition of OZ Minerals in 2023, bolstering its copper and nickel portfolio.

The company logo adorns the side of the BHP gobal headquarters in Melbourne on February 21, 2023. – The Australian multinational, a leading producer of metallurgical coal, iron ore, nickel, copper and potash, said net profit slumped 32 percent year-on-year to 6.46 billion US dollars in the six months to December 31. (Photo by William WEST / AFP) (Photo by WILLIAM WEST/AFP via Getty Images)

William West | Afp | Getty Images

Analysts led by Ben Davis at RBC Capital Markets said it remains unclear whether talks between Rio Tinto and Glencore could result in a simple merger or require the breakup of certain parts of each company instead.

Regardless, they said the M&A parlor games that arose following merger talks between BHP and Anglo American will undoubtedly “start up again in earnest.”

“Despite Glencore once approaching Rio Tinto’s key shareholder Chinalco in July 2014 for a potential merger, it still comes as a surprise,” analysts at RBC Capital Markets said in a research note published Thursday.

BHP’s move to acquire Anglo American may have catalyzed talks between Rio Tinto and Glencore, the analysts said, with the former potentially looking to gain more copper exposure and the latter seeking an exit strategy for its large shareholders.

“We would not expect a straight merger to happen as we believe Rio shareholders would see it as favouring Glencore, but [it’s] possible there is a deal structure out there that could keep both sets of shareholders and management happy,” they added.

Copper, coal and culture

Analysts led by Wen Li at CreditSights said speculation over a Rio Tinto-Glencore merger raises questions about strategic alignment and corporate culture.

“Strategically, Rio Tinto might be interested in Glencore’s copper assets, aligning with its focus on sustainable, future-facing metals. Additionally, Glencore’s marketing business could offer synergies and expand Rio Tinto’s reach,” analysts at CreditSights said in a research note published Friday.

“However, Rio Tinto’s lack of interest in coal assets, due to recent divestments, suggests any merger would need careful structuring to avoid unwanted asset overlaps,” they added.

A mining truck carries a full load of coal at Glencore Plc operated Tweefontein coal mine on October 16, 2024 in Tweefontein, Mpumalanga Province, South Africa.

Per-anders Pettersson | Getty Images News | Getty Images

From a cultural perspective, analysts at CreditSights said Rio Tinto was known for its conservative approach and focus on stability, whereas Glencore had garnered a reputation for “constantly pushing the envelope in its operations.”

“This cultural divide might pose challenges in integration and decision-making if a merger were to proceed,” analysts at CreditSights said.

“If this materializes, it could have broader implications for mega deals in the metals [and] mining space, potentially putting BHP/Anglo American back in play,” they added.

— CNBC’s Ganesh Rao contributed to this report.

Environment

Chime prices IPO at $27 per share, valuing fintech company at $11.6 billion ahead of Nasdaq debut

Published

9 hours ago

June 11, 2025

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Chime prices IPO at per share, valuing fintech company at .6 billion ahead of Nasdaq debut

Chime Visa Credit Card

Source: Chime

Chime priced its IPO at $27 per share on Wednesday, above the expected range, in an offering that values the provider of online banking services at $11.6 billion

The company raised roughly $700 million in the IPO, with another $165 million worth of shares being sold by existing investors. The stock is expected to begin trading Thursday under ticker symbol CHYM.

The offering comes after a years-long freeze in the fintech IPO pipeline, as rising interest rates and valuation resets kept many late-stage companies on the sidelines. The market has started to loosen. Trading platform eToro jumped 29% in its Nasdaq debut last month, and crypto company Circle popped after hitting the market last week.

Online lender Klarna, meanwhile, has delayed its IPO plans and last month reported steep quarterly losses.

The US’s largest solar + storage project just hit a big milestone

Published

9 hours ago

June 11, 2025

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The US's largest solar + storage project just hit a big milestone

AES just completed the first half of Bellefield, which will become the largest solar + storage facility in the US.

The 1,000-megawatt (MW) Bellefield 1 project in Kern County, California, includes 500 MW of solar and 500 MW of four-hour battery storage, all under a 15-year contract with Amazon. When the full 2,000 MW Bellefield project is done, it will be the biggest solar-plus-storage installation in the country.

“Completing the first 1,000 MW of Bellefield demonstrates how rapidly solar and storage can be deployed to meet the growing energy demand of data centers,” said AES CEO Andrés Gluski.

AES has locked in deals with “major global hyperscalers” – think tech giants like Amazon and Meta – for more than 10 gigawatts of clean power. Bellefield is a big part of that.

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To speed up the build and make it safer, AES used its own robot helper, Maximo. This AI-powered robotic system helped crews install solar panels faster and with more precision.

Once the full 2 GW project is online, Bellefield will generate enough electricity to power the equivalent of around 467,000 homes annually. It’s expected to prevent more than 1 million metric tons of CO2 emissions annually and boost air quality in the region.

Construction of Bellefield 1 created more than 700 union jobs, and AES says Bellefield 2, which is expected to wrap in 2026, will create around 1,000 union jobs at peak.

AES says it will start recognizing revenue from Bellefield 1 later this year, right on schedule.

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Environment

Kia’s new EV4 is already the best-selling domestic electric sedan in its home market

Published

10 hours ago

June 11, 2025

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Kia's new EV4 is already the best-selling domestic electric sedan in its home market

Kia’s first electric sedan is already being called “a box office hit.” In just its second month on the market, the Kia EV4 was the best-selling domestic electric sedan in Korea.

Kia EV4 is Korea’s best-selling domestic electric sedan

After launching sales in Korea in April, Kia sold just 831 EV4 models in its first month. Local reports attributed the “limited deliveries” in April to delivery delays and issues with subsidies.

Kia expected sales to rebound quickly after government subsidies resumed, and it appears that the issues are being resolved.

In May, Kia EV4 sales reached 1,373 in Korea, making it the best-selling domestic electric sedan. Hyundai’s IONIQ 6 also saw higher demand, with sales up 100% from last May to 754 units.

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With the IONIQ 6 refresh set to launch later this year, Hyundai is offering up to over $6,500 (9 million won) in discounts on the current model. Hyundai and Kia are dealing with an influx of new electric sedans with aggressive discounts from EV makers like BYD.

One industry insider called the Kia EV4 a “box office hit,” but it still has some time to earn that title. With a starting price of about $30,000 (41.92 million won), the EV4 is one of the most affordable models in its class.

It’s even cheaper than BYD’s Seal electric sedan, which launched in Korea in April, starting at 47.5 million won ($35,000).

The EV4 is available with two battery sizes: 58.3 kWh and 81.4 kWh, offering driving ranges of 382 km (237 miles) and 533 km (331 miles) in Korea, respectively.

Kia’s electric sedan can recharge from 10% to 80% in just under 30 minutes. The extended-range battery takes about 31 minutes to recharge.

Inside, you’ll find a similar setup to the brand’s other new EV models. The setup includes Kia’s new ccNC infotainment with nearly 30″ of combined display, including dual 12.3″ navigation and driver display screens, plus a 5″ climate control screen.

Kia EV4 Trim	Starting Price
Kia EV4 Standard Air	41.92 million won ($28,900)
Kia EV4 Standard Earth	46.69 million won ($32,000)
Kia EV4 Standard GT-Line	47.83 million won ($32,900)
Kia EV4 Long Range Air	46.29 million won ($31,800)
Kia EV4 Long Range Earth	51.04 million won ($35,000)
Kia EV4 Long Range GT-Line	51.04 million won ($35,900)

Kia EV4 prices by trim in Korea (Source: Kia)

The real test will come later this year when Kia launches the EV4 in Europe, followed by the US in 2026. In the US, it will be available with the same 58.3 kWh and 81.4 kWh battery packs, offering ranges of up to 235 miles and 330 miles, respectively. On the WLTP scale, it’s rated with a range of up to 391 miles.