Rio Tinto shares finished down 6.3 per cent to $143.06 after the mining giant confirmed the talks to acquire Glencore in an all-share transaction.
The pair held brief merger talks in late 2024, but they did not go anywhere.
Since then, Rio Tinto has appointed a new chief executive, Simon Trott, who took over in August.
Glencore is an Anglo-Swiss commodity trading and mining company headquartered in Switzerland and listed on the London Stock Exchange.
"There can be no certainty that an offer will be made or as to the terms of any such offer, should one be made," Rio Tinto said on Friday.
Under the UK's merger code, Rio Tinto has until February 5 to make a firm offer or walk away from any transaction.
Glencore's market capitalisation of 48.8 billion British pounds ($A97.8 billion) makes it among the world's 10 biggest mining companies.
Rio Tinto is second at $200 billion, behind BHP.
Both Glencore and Rio Tinto are major copper producers, and surging demand for the red metal is likely one impetus for the potential deal.
Glencore is also one of Australia's largest coal producers, with mines across NSW and Queensland that employ more than 10,000 people.Â
Rio Tinto mostly got out of the thermal coal business in 2018 by selling its coal mines to Glencore.
It's not clear whether Rio would want to get back into the coalmining business but in 2025 Glencore shifted its coal mines in Australia, Canada, South Africa and Colombia into an Australian subsidiary that would be easy to spin off or divest.
Glencore also has a big commodity marketing business that it's unclear whether Rio Tinto would be interested in.
Fitch Group's CreditSights called the merger talks "not unexpected given the 2024 talks and the strengthening strategic rationale".
The pending $79 billion merger between London-based miner Anglo American and Canada's Teck Resources had intensified the competitive pressure to scale, especially given copper's growing importance, CreditSights said.
The metal is widely used in modern electronics.
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