MELBOURNE – A freeze on Rio Tinto approaching Glencore for a takeover expires this week, but people who have been briefed by top executives don't expect any fresh tie-up talks for now as CEO Simon Trott focuses on cost cuts and asset sales.

Trott launched a simplification strategy to collapse Rio Tinto into three core businesses and concentrate on its most profitable assets after he took the top job at the world's second-biggest listed miner a year ago.

But within months, he was running the numbers on the prospect of a $200 -billion megamerger that would join Glencore's marketing and copper assets with Rio Tinto's operational expertise to maximise its copper potential.

Ultimately, Trott found no value case, and the miner walked away on February 5, setting in train a six-month standstill under UK takeover rules which expires on Tuesday.

“The company got a pretty clear message back when talks were on, that they shouldn’t go there. If Simon Trott started up talks again, then from a corporate governance perspective, the share price would take a hit,” said Michael Bell, chief investment officer of Solaris Investment Management in Brisbane, which holds Rio shares.

Trott has reassured Australian investors that Rio Tinto has no reason to revisit talks with Glencore, three people said.

Rio Tinto declined to comment.

“The changes that Rio Tinto has been making in the past few years with aluminium, lithium and copper are what people want to see for future growth, not a return to coal,” Bell added. Glencore is among the world's top five coal exporters.

Surging coal prices earlier this year had raised Glencore CEO Gary Nagle's hopes that Rio Tinto may be open to another look at creating the world's biggest mining company, three investors said in March.

"The ball is in Glencore’s court. Any offer of value would have to be vastly different to the offer of value that was discussed and rebuffed six months ago," said Glyn Lawcock, an analyst with Barrenjoey.

Glencore declined to comment.

The value equation has shifted in Glencore's favour, with its shares having jumped 33% this year, against an 18% rise in Rio Tinto's UK-listed shares.

The rally in Glencore's share price is "definitely something that reduces the chances that Rio will come back,” said analyst Jon Mills at Morningstar, adding it would dilute Rio’s shareholders and undermine Trott’s call to walk away.

Trott's immediate priority and first test is liberating $10-billion-plus through divestments, targeting half of that by year end, while expanding trading and pursuing copper opportunities.

Rio Tinto "should be looking to partner and bolt-on," he told analysts on a results call last week.

"The strategic challenge that Rio’s approach to Glencore highlighted – a lack of copper growth options post 2030 – is one that is not easily solved other than via M&A," Barclays analysts said in a note.

GLENCORE WOOS AUSTRALIAN INVESTORS
Glencore meanwhile has focused on proving up its copper assets, while also raising its visibility Down Under. After it reports its half-year results on Wednesday it will host calls with Australian institutional investors, including non-shareholders.

The investor outreach comes after the company underestimated the impact of Australian opposition to a potential merger with Rio Tinto, due to issues like its coal exposure, uncertainties around the value of its marketing business and historic corporate governance issues.

The reception to a potential marriage was much warmer in the UK, where BlackRock, a top shareholder in both firms, has backed consolidation among large miners.

As Glencore considers its options, a Sydney listing remains one avenue, alongside seeking other partners.

People familiar with Glencore's thinking told Reuters in June that a friendly approach by the Swiss company for a conversation with top global miner BHP, with its new boss Brandon Craig in place, could not be ruled out.

BHP declined to comment. Craig, however, has indicated BHP remains squarely focused on growing its own assets.

“Our position is that we would not support a Glencore tie with BHP or Rio,” said Bell of Solaris.

Chatter around an Australian listing has died down, two bankers said, though they said that did not mean it was off the cards. Several funds have expressed interest in investing should Glencore decide to list Down Under.