Rio Tinto and Glencore are resuming talks to combine the companies in a move that would create the world’s largest mining group.
The firms are looking at a possible all-share merger, with Rio Tinto as the larger of the two acquiring Glencore by a scheme of arrangement.
There have been talks before that broke down, but I think the pair has more chance of success this time. This is fundamentally about the race for copper and other natural resources – mirrored I guess at the geopolitical level with Trump’s push into Venezuela and Greenland.
It’s unclear if Glencore’s trading arm will be part of the deal, but it’s likely Rio would want to spin off Glencore’s coal business, which will be easier following the changes announced in May to restructure its coal business. Glencore shares jumped over 8% while Rio Tinto shares fell over 6% in Australia and were off 2.5% in London this morning.
Consolidation in the mining sector is inevitable as miners seek the scale required for stability and to fund new projects.
The lift for Glencore gave a positive hue to the FTSE 100, which climbed around 0.4% in early trade on Friday. Antofagasta and Anglo American were among the other risers, while Sainsbury’s fell nearly 5% despite a good Christmas trading update and raising its outlook for full year free cash to £550mn from prior guidance for £500mn. However, soft sales at Argos seems to have stopped it from upgrading full-year profit guidance from £1bn. The DAX and CAC also rose with European indices broadly firmer to end the week as defence names like Saab, Rheinmetall and BAE Systems continue extend a bumper run to kick off 2026.
Speaking of miners…shares of Amaroq soared on reports the US government is looking at investing in minerals mining in Greenland. Another potential to look at is Critical Metals Corp, which owns the Tanbreez rare earths project on Greenland. It’s rallied sharply this year already.
The dollar edged higher ahead of US jobs data and a possible Supreme Court tariff ruling, while the yen weakened and Treasury yields rose. EURUSD tripped up at its 50-day moving average at 1.1650, while sterling was also trading weaker against the dollar with GBPUSD back to lows of the year.
We should hear something from the Supreme Court today on tariffs but there will not be a full decision or statement- looks like it will be a public non-argument session and the justices may announce opinions, but not a ruling. Nevertheless, there could be headline noise if they sound like they will slap down the use of tariffs – perhaps first some hope that it means easier trade but likely to be quickly tempered by the knowledge that Trump will find another way. Tariffs are not going anywhere. Watch for a move in Treasuries on any headline – the mechanical process of lowering tariff revenue meaning more issuance and therefore higher yields.
Geopolitics is still very much in focus with Trump saying China taking Taiwan is up to Xi, threats about land strikes on drug cartels in Mexico, the ongoing Greenland situation and Iran now basically on fire. Protests in Iran escalated overnight and it looks like something could happen – any regime change would carry significant geopolitical and energy market risk. The focus now seems to be on Iran and traders are not well positioned for a rebound in prices, which are basically back to where they were prior to the removal of Venezuela’s Maduro. Crude oil rallied 3% to north of $62.50 to sit at its 50-day moving average, while WTI also backed off its 50-day moving average just shy of $59. A clear break above this level could see a swift move toward the $60–61 area.
Nonfarm payrolls today expected at 55k and unemployment rate ticking down to 4.5%, having risen to 4.6% in November from 4.4%. The data is still a bit messy following the government shutdown. Unemployment claims data yesterday showed 208k new claims, broadly in line with expectations but continuing claims rose more than expected. Important to remember lower labour supply due immigration policy which means we don’t need the kind of big payroll prints anymore as the employment breakeven rate has collapsed to about 30k from 150k a year ago.
Wall St was mixed as tech stocks faded some more. The Dow Jones rallied half a percent and the Nasdaq rose almost that much, while the S&P 500 split the difference to finish flat. Although defence stocks rallied on Trump’s call for $1.5tn in military spending Palantir was caught in the tech fallout. Lockheed Martin rallied over 4% and Northrop Grumman was up more than 2%, but we saw US defence names finish well off their highs as it seemed the headline-driven trade backed off a bit later in the session. Still defence names remain the play in this increasingly fragmented world.
Chipmakers were broadly lower with Nvidia down 2% and Broadcom, Intel and Micron all falling around 3%. Mag7 was mixed with Apple making a new cycle low and Microsoft down over 1% to close back below its 200-day moving average, while Amazon, Tesla and Google rallied. There were however signs of rotation other sectors like industrials (defence), consumer defensives and energy.
