Xstrata has fuelled renewed speculation of a merger with Glencore, the privately held commodities trader, with the chief executive of the mining company suggesting that a union of the two companies could create value.

The prospect of a merger between the two companies, which share a chairman, has been building in recent months, as Xstrata pursued deals to gain scale, while Glencore tapped capital markets.

“As the market looks around at possible options [for Xstrata and Glencore] that is one option they will be considering,” Mick Davis, chief executive of the Switzerland-based mining multinational, said. “There are great advantages to being able to see through Glencore's trading capability, and cementing that relationship could enhance that advantage rather than detract from it,” he said.