Glencore and Rio Tipped To Merge and Create Super-Miner Next Year

Super MinerTwo of Australia’s biggest miners, Glencore and Rio Tinto, could merge and create a super-miner as early as mid next year, according to a Bernsteins analyst.

Speaking to the Australian Financial Review, analyst Paul Gait said Glencore has already attempted to trigger a merger when it made a play for Rio’s biggest shareholder, Chinalco, in September of this year.

Chinalco has a 9.8 per cent stake in Rio. The company’s shares are now worth half of what they originally paid making them susceptible to the wooing of Glencore.

However Chinalco rejected Glencore’s September offer, forcing Glencore to wait until April next year to make another bid, as mandated by UK law.

“Is [Glencore] coming back?” Gait asked the rhetorical question, “In my view – yes.”

“Historically, Chinalco borrowed $14bn to buy this stake in Rio, it’s halved in value and people have been shot for far, far less than that in China,” he said.

“Politically, this is not a good thing. [Glencore’s] opening line to Chinalco I’m sure would be – ‘Guys are you happy? Tell me what’s upsetting you in the world of commodities.”

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