Merger Speculation Drives Momentum for Rio Tinto Shares

Market attention is fixed on a key regulatory deadline this week as rumors intensify regarding a potential mega-merger between mining giants Rio Tinto and Glencore. The speculation provided significant support for Rio Tinto's equity on Tuesday, further buoyed by a positive trading session for mining stocks overall.

The central question remains: will Glencore submit a formal bid before the deadline, or will it publicly withdraw its interest?

Key Data Points:
* Share Price (London): 6,956.50 GBX (+2.27%)
* Regulatory Deadline (“Put up or shut up”): Thursday, February 5
* Reported Advisors (Rio Tinto): JP Morgan, Evercore, Macquarie
* Reported Lead Advisor (Glencore): Citi

According to market sources, Glencore is preparing to formally appoint Citi as its lead investment bank to evaluate a potential acquisition of Rio Tinto. Should a deal materialize, it would create a global mining behemoth with a combined market valuation exceeding $200 billion.

On the other side, Rio Tinto is understood to have fortified its defensive position with a team of advisors led by JP Morgan, Evercore, and Macquarie. Under UK takeover rules, the current deadline for Glencore to either make a formal offer or walk away expires this Thursday. An extension of this deadline remains a possibility. The sustained speculation has been a clear catalyst for Rio Tinto's stock, which has appreciated by more than 15% since the start of the year.

Should investors sell immediately? Or is it worth buying Rio Tinto?

Operational Business Continues Unabated

Away from the merger headlines, Rio Tinto continues to advance its core operational projects. The company awarded a 175 million AUD contract to NRW Holdings on Tuesday for earthworks at a project in Western Australia.

Furthermore, Rio Tinto recently completed a strategic acquisition on January 30. In a joint venture with the Aluminum Corp. of China, it purchased a majority stake in Companhia Brasileira de Aluminio for approximately $902.6 million. This move strengthens Rio Tinto's integrated position within the aluminum value chain.

Sector-Wide Support Amid Mixed Commodity Signals

The broader mining sector provided a lift to the FTSE 100 on Tuesday, helping the index touch record intraday levels before a slight retreat. Commodity markets presented a mixed picture: copper held firm at around $6.04 per pound, while gold and silver saw notable buying interest, with gold trading near $4,922 per ounce. Iron ore, however, faced downward pressure, declining to $102.66 per tonne.

All eyes now turn to Thursday's deadline. Under UK regulations, Glencore must either table a formal bid or officially withdraw its interest by this date, barring a requested and granted extension. This decision will dictate the short-term narrative for both companies.