The mining sector appears to be gearing up for a tough year ahead, following market speculation about a potential merger between the industry’s giants. Rio Tinto and Glencore.

It comes after Bloomberg News report On Thursday Britain’s Rio Tinto and Australia’s multinational Rio Tinto and Switzerland’s Glencore were in early merger talks, although it was not clear whether the talks were still ongoing.

Separately, Reuters report Friday that Glencore approached Rio Tinto late last year about the possibility of combining their businesses, citing a source familiar with the matter. The articles, which were said to be short, are believed to be no longer active, the news agency said.

Rio Tinto and Glencore both declined to comment when contacted by CNBC.

The proposed merger between Rio Tinto, the world’s second-largest miner, and Glencore, one of the world’s largest coal companies, would be the largest mining merger ever.

Combined, the two companies could have a market value of nearly $150 billion, the industry’s longest-standing leader. Price BHPwhich is worth about $127 billion.

Analysts were very skeptical about the feasibility of the Rio Tinto-Glencore merger, pointing to the limited partnership, Rio Tinto’s problems. dual structure and differences of opinion on the nature of coal and the industry as factors that cause difficulty in concluding a contract.

“I think everyone is surprised,” Maxime Kogge, equity analyst at Oddo BHF, told CNBC by phone.

“To be honest, they have few overlapping assets. It is only copper where there are really synergies and opportunities to add assets to create a larger group,” said Kogge.

The world’s largest mining giants have been considering the advantages of large-scale mergers to increase their position in the change of powerespecially with the demand for metals such as copper expected to rise to the sky in the coming years.

A very interesting metal, copper is expected to face shortages due to its use in power plants, wind turbines, solar panels and energy storage systems, among other applications.

Oddo BHF’s Kogge said it is currently “very difficult” for major mining companies to bring new projects online, referring to Rio Tinto’s delays. opposites Resolution copper mine in the US as one example.

“It’s a very promising copper project, it could be one of the biggest in the world, but it has a lot of problems and in a way acquiring another company is a way to continue the growth of copper,” said Kogge.

“For me, the partnership is not very attractive,” he added. “It goes against what all these groups have tried before.”

Last year, BHP spent $49 billion on smaller rivals Anglo Americanthe request itself in the end he failed due to problems with the contract system.

Some analysts, including those at JPMorgan, expect another unsolicited offer for Anglo American to appear in 2025.

Before going after Anglo American, BHP he finished Acquisition of OZ Minerals in 2023, strengthening its copper and nickel portfolio.

Analysts led by Ben Davis at RBC Capital Markets said it was unclear whether the talks between Rio Tinto and Glencore would lead to a simple merger or require the divestment of parts of each company instead.

Regardless, they said that the M & A parlor game that emerged after negotiations between BHP and Anglo American will undoubtedly “restart in earnest.”

“Although Glencore approached Rio Tinto’s major shareholder Chinalco in July 2014 for a merger, it remains a surprise,” RBC Capital Markets analysts said in a note published on Thursday.

BHP’s move to buy Anglo American may have triggered talks between Rio Tinto and Glencore, the analysts said, with the former looking for more copper and the latter looking for a way to exit its major stake.

“We don’t expect a direct merger to happen because we believe that Rio’s owners see it as favoring Glencore, but (it is) possible that there is a deal out there that would make both groups of owners and managers happy,” he added.