Rio Tinto's talks to buy Glencore and create a new global industry leader could spur consolidation efforts across the copper-hungry mining sector and heap pressure on BHP, currently the world's biggest miner, to respond.

If the bid succeeds, and depending on any final value, it could rank among the biggest ten M&A deals yet and it reflects an appetite for scale that bankers have said could drive mega-deals in 2026.

"This is yet another example that the mining space is consolidating, and the big firms are being forced to do corporate action to create value," Mark Kelly, CEO at advisory firm MKI Global, said.

Last September, London-listed miner Anglo American announced what was then the sector's second biggest M&A deal, with a plan to merge with Canada's Teck Resources and forge a new global copper-focused heavyweight. The deal awaits regulatory clearance.

SOME ANALYSTS SAY BHP IS UNDER PRESSURE TO ACT
Half a dozen analysts, investors and bankers told Reuters that BHP, which has a market capitalisation of $161-billion, is the most likely spoiler of Rio's bid talks with Glencore, which could create a company worth almost $207-billion.

If BHP keeps out of the current talks, it may consider another deal to retain its leadership.

One banking source, who spoke on condition of anonymity, said that was the most likely outcome, given the company views Glencore's portfolio is too diverse and would benefit from asset sales. Regulatory authorities would almost certainly require some disposals to ease competition concerns.

BHP declined to comment.

"The most likely interloper to this deal is BHP," said Richard Hatch, analyst at Berenberg. "Essentially, with the deal driven by copper, we think that BHP could look to acquire Glencore with a rival bid, keep copper, and likely divest the balance."

Talks between Rio and Glencore are at a preliminary stage and Rio has until February 5 to make a formal offer, a deadline that could be extended.

The two sides have held talks in the past that have led nowhere and again they may fail to reach agreement.

George Cheveley, Natural Resources Portfolio Manager, Ninety One, which is a shareholder of Glencore, said BHP may feel the need to intervene, but also that it may find it "difficult emotionally" given its repeated failure to buy Anglo American.

To try to reinforce its dwindling dominance in copper, BHP tried to acquire Anglo American in a months-long pursuit in 2024. It briefly revived the effort in November last year.

Adding to the pressure on BHP, sources say the company is preparing to appoint a new CEO, most likely an internal candidate who will be expected to deliver change.

BHP declined to comment on its CEO succession.

SIZE MATTERS AND SO DOES COPPER
Apart from the quest for scale to increase margins and contain costs, copper is a major reason for tie-ups in the mining sector.

The mass adoption of artificial intelligence and the transition across the world to cleaner energy have driven demand for copper as the most cost-effective metal to conduct electricity.

The advantage of mergers is that they can provide access to producing assets, avoiding the lengthy, costly and uncertain process of hunting for new reserves.

"The real read across from both this and the Anglo-Teck deal is in copper – we know that copper is attractive and that’s what buyers want access to," said Kelly. If it does not bid successfully for Glencore, there are other possible targets to consider.

"Vale and Freeport are both going to be in focus - but it’s unlikely they're for sale," Kelly added.

Equally, BHP may decide it is better to do nothing, some analysts say.

"BHP has a cleaner growth profile in copper than a merged Rio/Glencore so I don't think they need to do anything," said Kaan Peker, an analyst at RBC.

"That said, if the transaction is successful, you might get some pressure with shareholders saying: 'How come Rio pulled this off and you couldn't with Anglo?'."