Rumors claim that in 2009, Mongolia sold its largest copper mine to Rio Tinto and stipulated that it must not be sold to China under any circumstances. How would you evaluate this claim?

It is not that Mongolia forbids direct sales of raw ore to China; rather, it requires that the ore be processed into copper concentrate before export to China—and Mongolia has even waived its export tariff, applying a 0% tariff on such exports. As for electricity used in copper production, Mongolia currently still purchases electricity from China; although Mongolia claims it plans to build its own power plant, construction has yet to begin. Likewise, its proposed 410-kilometer railway remains little more than an idea on paper. Currently, copper concentrate is exported via a road built by Rio Tinto connecting directly to a Chinese border port; Rio Tinto purchased hundreds of Chinese-made trucks, each with a 36-ton payload capacity, to transport the concentrate to China. Annual output currently stands at 780,000 tons of copper concentrate, with plans to reach 2 million tons per year by post-2030. According to available data, Rio Tinto’s total investment in this project exceeds $17 billion. At a copper price of $6,000 per ton, copper mining reaches its break-even point; only when prices exceed $6,000/ton does the operation generate gross profit. At the current copper price of $9,500/ton, gross profit amounts to several billion dollars annually—yet after deducting various costs, net profit falls short of $1 billion, and Mongolia receives 34% of that net profit, amounting to roughly $500 million per year.

The 'giant' mining merger exceeding $200 billion has 'collapsed': Rio Tinto abandons merger talks; Glencore’s stock plunges over 10% intraday.

In its announcement, Rio Tinto stated that it had rigorously evaluated this opportunity against the stringent criteria set forth at its December 2025 Capital Markets Day, prioritizing long-term value creation and delivering leading shareholder returns. Under Rule 2.8 of the UK Takeover Code, Rio Tinto—and any party acting in concert with it—is now restricted from making further approaches unless Glencore’s Board consents or certain exceptional circumstances arise, such as a third-party offer. Copper Resource Competition Fuels Merger Wave This potential deal represents the latest in a series of merger attempts among the world’s top mining companies. As major miners seek expansion in copper operations and scale up to attract greater attention from global investors, mega-mergers across the sector have surged markedly. Soaring demand for copper—driven by worldwide deployment of electric vehicles, renewable energy infrastructure, and data centers—has prompted mining firms, after years of dormancy, to pursue large-scale acquisitions. Developing new mines typically takes several years—or even decades—and carries significant risks of cost overruns; mergers thus enable mining companies to ramp up output faster than greenfield development. Rio Tinto’s market capitalization stands at approximately $156 billion, while Glencore’s is around $75 billion. A merger would double Rio Tinto’s existing copper output and, amid copper prices nearing historic highs, could position it as the world’s largest copper producer—adding roughly 1 million tons of future copper capacity to its portfolio. According to White & Case LLP, the value of mining deals in 2025 soared to the highest level in 13 years—signaling a shift in mining executives’ attitudes: for the past decade, they had remained cautious about large transactions, having overpaid for assets during China-led commodity booms around 2011. As the current largest mining company by market cap, BHP Group attempted multiple acquisitions of Anglo American over the past two years—all unsuccessful. Anglo American instead agreed to merge with Canada’s Teck Resources; that deal received shareholder approval from both companies late last year. Glencore Emphasizes Its Independent Growth Prospects In response to the collapsed negotiations, Glencore issued a comprehensive statement underscoring the strengths of its independent strategy: “Glencore’s standalone investment case is robust. We operate a diversified business across multiple commodities, supported by one of the industry’s strongest marketing franchises.” Glencore added: “We have optimized and streamlined our operational structure, enhancing accountability and execution—enabling us to deliver full-year production within guidance ranges for key commodities for the second consecutive year.” Regarding copper specifically, Glencore expressed strong confidence: “We hold an outstanding portfolio of copper projects, positioning us to evolve from an already significant copper producer into one of the world’s largest over the next decade.” The company affirmed: “We remain firmly focused on achieving our 2026 priorities—hitting operational targets, mitigating risks, and successfully advancing organic growth—all aimed at creating long-term value for shareholders.” Third Failed Attempt in Over a Decade Wednesday’s announcement marks the third time—in over a decade—that Rio Tinto and Glencore’s merger efforts have ended in failure. The idea first surfaced before the 2008 global financial crisis; it was revived in 2014, when Rio Tinto swiftly rejected Glencore’s informal overture. Roughly a decade later, in 2024, serious discussions resumed once again.

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