The $65bn merger between commodities trader Glencore and miner Xstrata is on the verge of collapse.

Glencore is being held to ransom by Qatar Holding, after the Qatari sovereign wealth fund demanded a major increase to Glencore's bid price for the rest of Xstrata.

Glencore initially offered the Qatar Holding $26.4bn for the rest of Xstrata but Qatar has hit back by asking for better deal terms.

Qatar, which has quietly built its position in Xstrata by five fold since Glencore announced it was considering to take over the miner, wants the offer raised to 3.25 Glencore shares for each of Xstrata's.

This is a big change from the existing offer of 2.8 of Glencore shares for each of Xstrata's – which could mean that the deal overall, could be put on ice as the two companies renegotiate it.

Shareholders are set to vote on July 12th regarding the merger.

For Glencore to be successful in its bid, it will need 75 percent approval from Xstrata shareholders.

Written and Presented by Lianna Brinded.