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Rio Tinto and Glencore have abandoned talks over a possible merger that could have created the world’s largest mining company.
The two firms said last month they were in early discussions about a potential deal, which would likely consist of Rio Tinto acquiring Glencore.
However, Rio Tinto told shareholders on Thursday that it was “no longer considering a possible merger or other business combination with Glencore”.
The companies, which are both listed on the London Stock Exchange, said they were unable to reach an agreement that worked for both parties.
Glencore’s share price dropped by about 7% following the announcement.
The Switzerland-based mining firm said Rio Tinto wanted to keep both the chairman and chief executive roles as part of its bid, which it said “significantly undervalued” its contribution to the combined group.
It also said it felt the potential offer did not adequately value its copper business and its potential for growth.
Glencore is a big producer of copper as well as other metals like cobalt and nickel while Rio Tinto is a major iron ore producer and also focuses on metals and minerals including diamonds and aluminium.
A merger could create the world’s largest mining company with a combined market capitalisation of about 200 billion US dollars (£150 billion).
The pair had already held discussions over a tie-up in 2024 but they failed to agree on the conditions of a deal and it never came through.
Glencore asserted on Thursday that its “investment case was strong” and its portfolio of copper projects “provides a pathway from an already significant copper producer, to become one of the world’s largest producers over the next decade”.
Rio Tinto’s shares fell by about 2.5% on Thursday afternoon.
