A New Global Giant: Chinalco’s Role in Creating the World’s Preeminent Miner

The Aluminum Corporation of China (Chinalco), a principal shareholder in Rio Tinto Group, is reportedly prepared to endorse a potential merger between Rio Tinto and Glencore Plc. This strategic consolidation would create the world’s preeminent mining conglomerate and significantly expand Chinalco’s indirect access to copper, a critical commodity for global industrial development. Although formal authorization from the Chinese government remains a prerequisite, sources familiar with the situation indicate that Chinalco is currently engaged in high-level consultations with state authorities and is anticipated to support the transaction.

Earlier this month, Rio Tinto and Glencore confirmed they were exploring a combination, though specific structural details remain undisclosed. Pursuant to regulations established by the UK Takeover Panel, Rio Tinto is required to formalize its proposal or terminate discussions by February 5. While previous negotiations in late 2024 were unsuccessful due to disagreements regarding valuation and premiums, the current momentum suggests a renewed appetite for the tie-up. Chinalco, which has maintained a substantial interest in Rio Tinto for nearly twenty years, currently possesses 14.55% of the company's London-listed shares. Reports suggest that Chinalco is willing to accept a diluted percentage in a larger merged entity, provided that favorable terms or compensatory measures are negotiated with Rio Tinto.

As the leading global consumer of industrial metals, China’s regulatory stance is a decisive factor in major international mining acquisitions. Even beyond direct equity stakes, the approval of Beijing’s antitrust authorities is essential for the viability of such large-scale mergers. Historical precedents, such as Glencore’s acquisition of Xstrata in 2012, demonstrate that Chinese regulators often demand specific concessions—such as the divestment of key assets—to mitigate market concentration concerns.

Neither Rio Tinto nor Chinalco have issued formal statements regarding the ongoing discussions, and relevant state commissions in China have yet to provide official commentary. Nevertheless, the alignment of Chinalco’s interests with a more diversified mineral portfolio reflects China’s broader strategy of securing long-term supply chains for essential metals. Should the merger proceed, it would represent a transformative shift in the global extractive industry, placing a significant portion of the world's copper and diversified mineral output under a single corporate umbrella.