Chilean and Argentine assets could lie at the heart of possible Rio Tinto-Glencore power play

Rio Tinto seems relentless in its aim to expand and lead the global market for basic materials essential to the energy transition, with Argentina and Chile as strategic focuses, as Glencore is emerging as a potential key ally.

Rumor is rife of merger talks between the two giants, although neither Rio Tinto nor Glencore have commented on the matter. However, various analysts are eagerly anticipating what could become one of the largest deals in the mining industry.

While Rio Tinto holds a 30% stake in northern Chile copper mine Escondida, Glencore owns a 44% share in the Collahuasi copper operation, just 200km away. These are two of the world’s largest copper deposits. Additionally, both companies have promising lithium assets in neighboring Argentina.

On top of that, they are corporate behemoths. Rio Tinto's market capitalization is approximately US$100bn, while Glencore's is around US$57bn, according to financial system data.

Rio Tinto's expanding assets

In Salta province, northwest Argentina, Rio Tinto is developing its Rincón project, which recently produced its first lithium. The company plans to invest US$2.5bn to expand its production capacity to 60,000t/y of battery-grade lithium carbonate.

Additionally, with its US$6.7bn acquisition of Australia’s Arcadium Lithium, the British-Australian multinational is on track to become a major lithium player. The acquisition gives it production capacity of 75,000t/y of lithium carbonate equivalent (LCE), with planned expansions doubling that volume by the end of 2028.

The Argentine operations that Rio Tinto will acquire through this deal, pending regulatory approvals estimated to be obtained by mid-2025, include the Fenix plant (with an expansion in the pipeline), the Güemes lithium chloride plant and Olaroz.

Projects under construction or in the process of obtaining environmental approval include Sal de Vida and Cauchari. Additionally, Rio Tinto has its interest in the Chilean Escondida mine and the Granja copper project in Peru.

Rio Tinto is also expanding its reach through its copper heap leaching technology company, Nuton. In the fourth quarter of last year, Nuton signed an option agreement for a joint venture with Canadian company Aldebaran Resources for the Altar copper-gold project. Nuton also increased its stake in McEwen's Los Azules initiative to 17.2%, as confirmed in the company’s fourth-quarter results report.

Both Altar and Los Azules are located in San Juan province, Argentina.

Glencore, not far behind

The Switzerland-based miner is actively participating in the expansion of the Collahuasi mine in Chile’s Tarapacá region. Collahuasi is an asset that is shared with Anglo American and Japanese partners. In 2015, Rio Tinto reportedly made an offer to enter the business, but the proposal was rejected.

In addition, Glencore fully owns the promising Pachón and Mara copper projects in Argentina. Together with Collahuasi, these projects are central to Glencore’s goal of increasing its overall copper production by 1Mt/y.

Mara, located in Catamarca province, is projected to produce 278,000t/y of copper over 28 years. Meanwhile, El Pachón, in San Juan province, aims for an output of 350,000t/y for 25 years.

A transformative combination

A merger between Rio Tinto and Glencore would not only disrupt the global mining market but could also be a rival to Chile's state-owned company Codelco, the current world leader in copper production. 

This potential combination of resources and expertise would significantly reshape the landscape of the energy transition materials market.