Xstrata, the Swiss-based miner, has proposed a “merger of equals” with its rival, Anglo American, in a move that could set off another wave of consolidation in the international mining industry.

Xstrata, whose market value is now approximate to Anglo's after a string of acquisitions in the past decade, said in a statement yesterday it believed a merger was “highly compelling” and would provide “enhanced scale and financial flexibility to fund future growth”.

However, London-based Anglo American said in a statement talks were “at a very preliminary stage and there is no certainty that any transaction will be forthcoming”. Neither company offered details of terms, including whether Xstrata proposed to offer cash or shares. Xstrata is keen to lead the next round of global mining consolidation and has been open about its interest in combining with Anglo as well as possibly reviving its bid for Lonmin, the platinum miner. Anglo “does not see enough benefits” in buying or merging with Xstrata and views the Anglo-Swiss company's assets as inferior to its own, according to a banker familiar with the company's thinking. However, Cynthia Carroll, Anglo's chief executive, has been under fierce pressure to create value for shareholders since cutting Anglo's dividend in February, a move that especially infuriated shareholders in South Africa, where it has the core of its operations.