Glencore boss eyes fresh merger talks with Rio Tinto

GLENCORE CEO Gary Nagle is hoping a recent surge in coal prices will help bring Rio Tinto back to the table for another attempt at creating the world’s biggest mining company, said Reuters on Friday. The newswire cited three investors who met with leaders of both firms in Australia.Glencore and Rio Tinto held talks earlier this year on a $240bn merger that would have combined the former’s marketing operations and copper assets with Rio Tinto’s operational expertise. Discussions collapsed in February over disagreements on valuation, and under UK rules Rio Tinto cannot restart talks with Glencore for six months, said Reuters.Nagle was optimistic about the prospects of reviving a deal, the investors said, speaking anonymously to Reuters as the discussions were private. Glencore and Rio Tinto declined to comment, said the newswire.A key sticking point, in Glencore’s view, was that Rio’s valuation of Glencore was anchored to the spot price of commodities such as coal on January 7, the day before the talks became public. Nagle argued that projected prices should also have been considered.Since January 7, coal prices and Glencore’s shares have risen 26%, while Rio’s shares have climbed 9%, weighed down by weaker iron ore. Glencore shares now represent about 35% of a combined market value, up from 31.5% when talks became public and closer to the 40% Glencore had sought.Nagle also anticipates that Rio Tinto’s iron ore division will come under pressure as the market tips into surplus, which would further shift relative valuations in Glencore’s favour.Not all investors are convinced. “I don’t see how Rio can change their mind in six months just because coal has gone up and iron ore has gone down,” said one.The post Glencore boss eyes fresh merger talks with Rio Tinto appeared first on Miningmx.Weiter zum vollständigen Artikel bei Mining.com Weiter zum vollständigen Artikel bei Mining.com