Glencore International's effort to form the world's fourth-largest mining conglomerate by merging with Xstrata edged closer to collapse Thursday, after Xstrata's second-largest shareholder, sovereign wealth fund Qatar Holding, said it would vote against the deal, based on the current offer.

In its second public statement since Glencore and Xstrata announced plans to merge into a mining juggernaut with a market capitalisation of about $70bn, Qatar Holding said it "has determined that it will not support the proposed merger terms of 2.8 new Glencore shares for every one existing Xstrata share…although it continues to support the principle of a combination of Glencore with Xstrata."