By Clara Denina
LONDON (Reuters) -Activist fund Palliser Capital has intensified pressure on Rio Tinto to mount a “now or never” counterbid for Teck Resources, urging the mining giant to unify its dual-listed structure and spin off its base metals business to create a copper powerhouse, a letter to the board seen by Reuters shows.
In the letter dated October 17, Rio shareholder Palliser urged the company to challenge Teck’s agreed merger with Anglo American to gain control of a tier-one copper portfolio that combined could produce 1.3 million metric tons a year.
Palliser – which sources close to the matter say holds around a $400 million stake in the miner, or less than 1% – confirmed the authenticity of the letter, but declined to comment.
Its letter said the deal would diversify Rio beyond iron ore, unlock at least $800 million in cost synergies, and accelerate copper growth by a decade at lower risk and cost than greenfield expansion, better positioning the miner for the global clean energy transition.
Commenting in response to the letter, Rio Tinto told Reuters it remained focused on “maximising the value we deliver for shareholders”, and will provide an update on its strategy at its Capital Markets Day in five weeks’ time.
It said the arguments Palliser had put forward over its dual listing had already been extensively debated and rejected by shareholders.
ENDING DUAL LISTING NECESSARY FOR MERGER, LETTER SAYS
Under Palliser’s plan for a Teck counterbid, Rio, currently dual-listed in London and Sydney, would unify into a single holding company based in Australia, and eventually split into two entities: one centred on copper, aluminium and zinc in Canada, and the other on iron ore in Australia.
The shareholder, which has campaigned for over a year to unify Rio, said in the letter the company’s dual-listed structure makes a stock-based offer for Teck “structurally impossible”, forcing the miner into costly or dilutive alternatives.
“Unification is not optional – it is a prerequisite for any credible strategic combination,” the letter said, urging the board to act swiftly before the Anglo-Teck tie-up is finalised.
LETTER ALSO URGES DEMERGER
It said a subsequent split into two entities would unlock trapped value and attract new investors seeking a pure-play copper stock.
“Rio Tinto can table a meaningfully more attractive offer, with an appropriate up-front premium, coupled with the ability for Teck holders to participate in Rio Tinto’s prospective re-rating as FutureMetalsCo is demerged,” it said.
Anglo and Teck agreed to merge without a premium to shareholders, who will vote on the deal on December 9.
A source close to the matter said Palliser has a minor shareholding in the Canadian miner. The fund did not respond to a request for comment on that holding.
At Rio’s 2025 annual general meeting, shareholders overwhelmingly voted against Palliser’s proposal to review the dual-listed structure, siding with the board.
The miner’s board at the time cited tax considerations and said a unified listing would be costly and did not provide the flexibility for big M&A that Palliser had suggested it would.
“Rio Tinto strongly rejects all of the unfounded assertions made by Palliser regarding the quality of analysis represented to shareholders,” Rio said on Monday.
(Reporting by Clara Denina; Editing by Jan Harvey)
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