Aluminum Corporation of China, a major shareholder in Rio Tinto, is set to support the mining giant’s potential takeover of Glencore, as it would give the Chinese firm additional exposure to copper supply, sources with knowledge of the matter told Bloomberg on Monday.
Rio Tinto Group and Glencore Plc earlier this month confirmed they have been engaging in preliminary discussions about a possible combination of some or all of their businesses, which could include an all-share merger between Rio Tinto and Glencore.
A potential merger would rank among the largest transactions ever attempted in the mining sector. The combined company would be valued at about $260 billion and would control a broad mix of iron ore, copper, and other industrial metals at a point when supply growth across several markets is slowing.
A deal would redraw the global map of mining as Rio Tinto’s iron ore business and Glencore’s copper portfolio and global trading operations would cover both production and distribution at scale – a combination few miners can match.
See also: Key Chinese Rio Tinto Shareholder Backs Glencore Bid to Gain Copper Access
“Any final approval would require a go-ahead from the Chinese government, but Chinalco, as the company is known, is already in talks with authorities and is expected to back the ambitious tie-up, according to people familiar with the matter. They asked not to be named as the discussions are not public.”