Rio Tinto rules out Glencore merger

Black Cat Syndicate’s (ASX: BC8) Lakewood processing facility has begun processing ore from the Fingals open pit and Majestic underground mines in WA.In February last year, Black Cat acquired the facility from Westgold Resources (ASX: WGX), in a move that brought forward Kal East by 15 months.Across the next 12 months, the company will invest $20m of operating cashflow to expand the processing facility’s capacity from 1.2mtpa to 1.5mtpa.Meanwhile, the Fingals open pit and Majestic underground mines continue to ramp up, with an estimated 183kt stockpile of ore currently available for processing.Black Cat managing director James Bruce comments on the milestone.“The successful ramp-up of the Fingals and Majestic mines within twelve months and within budget is a credit to the ‘can-do’ culture and experience of the Black Cat team,” he said.“The capital-efficient expansion of Lakewood will unlock further value from our Kal East operations for years to come.“Securing sufficient contracted fuel is an important outcome at a time when uncertainty persists across Australian fuel supply networks.”Black Cat says it is not currently experiencing supply issues with diesel or fuel. Lakewood is grid connected and does not require fuel for the vast majority of its power requirements.

South32 (ASX: S32) has reported solid operating and financial performance for Q3 FY26, maintaining production guidance across all operations except Australia Manganese.   The company delivered net cash generation of US$121m despite weather disruptions and continued investment in growth. South32 chief executive Graham Kerr said several operations delivered strong results during the quarter, supported by higher aluminium prices, record year-to-date production at Brazil Alumina, and a record US$135 million distribution from Sierra Gorda. Group alumina production increased by 1% year to date, while aluminium production was broadly unchanged, with Hillside Aluminium continuing to test maximum technical capacity. At Australia Manganese, however, FY26 production guidance was revised down 6% to 3,000kwmt, reflecting elevated site water levels, wet season rainfall and impacts from Tropical Cyclone Narelle. South32 said strong operating performance and commodity price support helped offset US$158m in growth capital expenditure at the Hermosa project during the quarter, with the company’s balance sheet supporting ongoing investment in copper, zinc and silver growth. At Hermosa, South32 reported progress in federal permitting under the FAST-41 process, alongside continued advancement of underground and surface infrastructure at the Taylor zinc-lead-silver project. Cannington remained on track to meet production guidance despite significant flooding in northwest Queensland, while Sierra Gorda maintained guidance despite wet weather impacts in Chile.  South32 also highlighted potential costs pressures linked to higher freight rates, raw material prices and stronger producer currencies, while noting measures have been implemented to mitigate supply chain risks associated with conflict in the Middle East. Following the quarter, the company paid a fully franked interim dividend of US$175m, while continuing its capital management program 

Rio and Glencore at it again with mega merger talks  Mining majors Rio Tinto (ASX: RIO) and Glencore have confirmed they have entered preliminary takeover discussions for a merger that could create the world’s largest resources company.This is not the first time Rio and Glencore have been in merger negotiations. In 2024, discussions between the companies were unsuccessful due to valuation, leadership and cultural differences after Glencore sought a merger ratio of about 40%, implying a premium of more than 25% based on valuation at the time, and pushed for chief executive Gary Nagle to lead the combined company.  If successful, the merger would be the latest major transaction seen by the sector following last year’s Anglo American $85b merger and acquisition with Canadian copper miner Teck Resources.  The current preliminary discussions are exploring possible combinations of some or all of the businesses, which could include an all-share merger between the companies. Copper appears to be the focal point of the merger as Rio moves towards becoming a global copper leader and acquiring Glencore’s substantial copper assets, including its Mount Isa operations in Queensland, aligns strategically with this shift. This news is the latest in a wave of copper acquisitions as companies around the world look to take advantage of growing global demand and soaring prices. Rio has been advancing its copper portfolio, including ramping up operations at Oyu Tolgoi in Mongolia and pushing progress at Resolution Copper in the US. Rio expects to produce about 870,000t of copper in FY26, underpinned by production at its Oyu Tolgoi — which is anticipated to reach peak production of 500,000tpa in its lifetime — as well as its copper assets across the Americas.  Glencore’s copper outlook for FY26 is almost identical, with production expected to reach between 810,000 - 870,000t, and has a bullish growth outlook of 1.6mtpa by 2035.  Despite the shift in focus to copper, there is little synergy between the two miners' current operations — with iron ore forming the backbone of Rio’s business and Glencore remaining one of the world’s largest coal producers. Considering Rio unloaded the last of its coal assets in 2018 following investor pressure, how Glencore’s significant coal assets will align with Rio’s future is yet to be determined.  Though there is no certainty that an agreement will be reached, Rio has until February 5 to make a formal offer to Glencore. 

BHP (ASX: BHP) has entered a binding agreement with Global Infrastructure Partners (GIP), in relation to the miner’s share of WA Iron Ore’s (WAIO) inland power network. Currently, BHP holds an 85% interest in WAIO. Under the agreement, an entity will be formed to split this interest with BHP controlling 51% and GIP holding the remaining 49%. BHP will pay the entity a tariff linked to its share of WAIO’s inland power across a 25-year period. BHP retains full operational control of WAIO including its inland power structure. BHP chief executive Mike Henry says he is pleased with the agreement. “This arrangement enables BHP to access capital and maintain operational and strategic control of a critical part of WAIO’s infrastructure,”…