The valuation wires clearly got crossed between Rio Tinto Plc. (RIO.LSE, RIO.NYSE) and Glencore Plc. (GLEN.LSE) as their discussions around a potential merger unraveled. The proposed tie-up would have created a US$230 billion sector heavyweight and roughly doubled Rio’s copper output, but the agreement fell apart over pricing and control. 

Glencore asked for a higher premium than Rio was willing to pay, while Rio sought to retain the Chairman and CEO roles. UK takeover rules now force both parties and their bankers to lay down tools for at least six months. 

In the meantime, Glencore can refocus on sanctioning its major copper growth projects in Argentina (El Pachón and Agua Rica) and working to keep the Horne smelter running. 

For investors, the pause underscores both the strategic value of copper and the limits of deal-making when valuation discipline and corporate cultures collide. 

In the Weekly Market Digest, a sharp step-up in capital spending by major US technology companies rattled markets last week. The year-over-year increase by the four major tech giants is roughly equivalent to the market value of the failed merger between two global mining majors. By the end of the week, safe-haven assets recovered somewhat, as did most of the market.

The Exploration Insights Portfolio delivered a positive return last week but lagged the precious metal equity ETFs, due in part to the delayed end-of-week rebound in the ASX markets for a silver explorer. On the positive side, a gold developer once again demonstrated its leverage to rising gold prices, supported by a lower-risk jurisdiction with improving permitting timelines. 

In Stock Talk, I cover grassroots copper exploration updates from eastern Peru and southeastern Australia. I also discuss how a cash-flowing royalty company is executing its business model, which had previously delivered outsized returns for the portfolio. Finally, I review some more high-grade Ni-Cu-PGE-Au results from a magmatic deposit in Minnesota. I am traveling this week to visit its new acquisitions in Michigan.