Shares in Rio Tinto have jumped on news it was approached by Swiss-based mining giant Glencore about a merger.
Rio Tinto rejected the bid, made in July, it said on Tuesday.
But the company's shares gained as much as 4.7 per cent in morning trade, and at 1251 AEDT were up $2.01, or 4.5 per cent, at $59.60.
Rio said its board concluded unanimously in August that a combination was not in the best interests of its shareholders, after consulting with financial and legal advisers.
A merger of the two companies would have created a company worth an estimated $US160 billion ($A173.11 billion), the world's largest mining company.
Rio Tinto's status as the world's number two iron ore miner would combine with Glencore's market leading positions in iron ore, copper, nickel and zinc.
Glencore is headquartered in Switzerland, and operates more than 150 mines and production sites across the world, including Australia.
It is listed on London's stock exchange, with secondary listings in Hong Kong and Johannesburg.
Rio released a statement to confirm the Glencore approach after press reports indicated Glencore had reached out to Rio's largest shareholder, China's Chinalco.
Rio chairman Jan du Plessis said the board believed the continued successful execution of the company's strategy would allow the company to significantly increase free cash flow in the near term, and materially increase returns to shareholders.
No further discussions have taken place with Glencore, Rio said.
"The board's rejection was communicated to Glencore in early August and there has been no further contact between the companies on this matter," it said.