With gold and silver prices at an all-time high, and critical minerals such as lithium, copper and rare earths at the core of electrification, computing and defence systems, mining M&A is flying high. By David Prosser.
The mining sector is booming. M&A hit almost $94bn in 2025, according to data from White & Case’s M&A Explorer, making it mining’s most buoyant year for more than a decade. Megadeals such as Anglo American’s $53bn merger with Teck Resources were a big part of the story, but dealmakers were active at every level.
Activity shows few signs of slowing in 2026; more than $11bn of mining and metals financing and M&A was announced in January alone, according to Mining Beacon. And while talks over what would have been the biggest transaction of them all – the $260bn merger of Rio Tinto and Glencore – were called off in February, speculation remains that a deal may yet be possible.
The UK, moreover, is in the thick of the action – not because it’s a centre of mining activity, but because so many of the large global diversified mining companies are listed on the UK markets. Last year saw 15 transactions involving UK-listed mining targets, according to White & Case’s data.
“London remains attractive to mining companies,” says Simon Tysoe, partner at Gibson Dunn, who specialises in energy and infrastructure M&A. “The UK capital has more liquidity for the larger players than, say, Canada – another major mining market – and it also has investors who feel very comfortable with large, listed entities whose businesses are entirely international, rather than domestic.”
London’s investors are comfortable with large, listed entities whose businesses are entirely international
What underpins mining’s M&A boom? “There is a constant debate, with all natural resources, about whether it is better and cheaper to buy or to build,” says Tysoe. “Does it make sense to do greenfield development to increase your production or to buy someone else to get that lift?”
Buy currently has the edge over build and is likely to do so for some time to come, he adds – largely because the huge cost of getting permits and developing new mining assets, particularly in more and more inaccessible locations, is daunting. In contrast, M&A provides much more rapid results, and falling acquisition finance costs over the past year or so make it still more attractive. Of course, that may or may not continue, with geopolitical turmoil ramping up.
Manic miners
As for why mining companies are scrambling to increase production, the answer is simple: demand. In everything from copper to lithium, the gap between supply and demand continues to grow, driving market prices ever higher.
Take precious metals. Demand for gold rose sharply last year, according to World Gold Council data – partly driven by investors flocking to the “safe haven” status of the metal, but also because central banks and industrial purchasers continued to buy up gold stocks. This year, the gold price has hit an all-time high, moving (well) above $5,000 per ounce for the first time.
Producers such as Northern Star Resources, which paid $3.3bn for De Grey Mining last year, Equinox Gold, which acquired Calibre Mining for $1.8bn, and Gold Fields, which spent $2.4bn on Gold Road Resources, have all earned an immediate return on their M&A activity.
Mismatched demand and supply makes copper growth options incredibly valuable
The rise in the price of silver has been even more dramatic – up more than 50% in January alone. Again, investors’ flight for safety nudged demand up, but perhaps the bigger boost came from silver’s crucial importance to the production of in-demand circuit boards, semiconductors, and electrical contacts. Significant deals last year included Coeur Mining’s $1.7bn acquisition of SilverCrest Metals and Pan American Silver’s $2.1bn takeover of MAG Silver.
With price rises swelling mining company coffers, the stage is set for further dealmaking, says Lee Downham, industrials and energy managing partner at EY. “If you’re a gold company that is now looking at $5,000 or more for each ounce of gold, rather than the $1,000 or so that you had been getting, you’re likely to be in a much stronger capital position to look at M&A.”
Copper-bottomed investments
In a hot mining and metals market, copper is scorching. With S&P Global predicting a 50% increase in demand and a shortfall of 10 million tonnes by 2040, the race to boost production is accelerating.
Last year’s $53bn merger of London-listed Anglo American and Canada’s Teck Resources was all about increasing market share in copper, the price of which has risen by more than 30% since last autumn. That’s because copper is not only critical for the energy transition – wind, solar and electric vehicles require massive amounts of copper for wiring and electrical components – but is also needed for AI infrastructure. Defence companies, buoyed by increased government spending in many countries, are also major copper buyers.
The merged entity, Anglo Teck, will be the fifth-largest global producer of mined copper, with 70% of its revenues generated by the metal. It will retain Anglo’s primary stock market listing in London, but will be headquartered in Vancouver.
Increased scale unlocks strategic advantages, such as shared infrastructure. The two companies operate separate copper mines in Chile, for example, that are just a few miles apart; the merger will increase production yields and reduce costs.
But consolidation only goes so far. The pressure is on for a meaningful increase in net output. “The demand economics are shifting upwards rapidly,” explains EY’s Lee Downham. “The mismatch between demand and supply makes copper growth strategy options incredibly valuable.”
Long lead times make it all the more important to focus on finding new deposits sooner rather than later, he adds: “To get a world-class copper mine from discovery to production takes decades.”
Demand is electric
In industrial metals, meanwhile, the imperative to build scale has proved even more powerful. “The pace of electrification is accelerating – not just in developed countries, but also in those developing countries that are now industrialising very rapidly,” says Alan MacPherson, partner and sector lead for mining at PwC. “As the world moves away from fossil fuels, there is unprecedented demand for metals such as copper, lithium and cobalt.”
Lithium, for example, is a key element in battery production – not just for electric vehicles, but for the storage solutions that can mitigate the intermittent nature of renewable energy. And copper, vital for wiring up those renewable energy assets, is also central to the flourishing AI, data centre and broadband industries (see ‘Copper-bottomed investments’ box).
Critical minerals such as these – so named because certain components, including those used in advanced defence systems, cannot be made without them – have drawn the attention of both governments and dealmakers. In some cases, including in the UK, state actors are investing alongside private sector mining (see ‘Banking on batteries’ box).
“There is a huge emphasis on growth, and critical minerals sit at the heart of the energy transition, defence infrastructure, data centres and AI,” says Victor Naathen, KPMG’s UK head of mining.
The question of geopolitics is at the heart of every deal in the mining sector right now
In some areas, that can pose challenges to dealmaking. In the past, countries have sought to protect domestic supplies of key resources by blocking transactions involving overseas acquirers. “All resources deals are dependent on government consent one way or another,” says Tysoe. Protectionist activity, such as Chinese restrictions on rare earth exports last year, also makes the need to secure new supply lines more urgent.
Keeping it clean?
“Environmental, social and governance (ESG) factors are a core element of every due diligence process,” says KPMG’s Victor Naathen. “With any type of natural resources investment, companies are dependent on their licence to operate; without that, their entire business is at risk.”
Often criticised for their impact on the environment – whether it’s for extracting materials that drive carbon emissions or for pollution and depletion problems – mining companies are always only one scandal away from disaster.
Historical issues around health and safety, human rights and child labour have also dogged the sector. And from a governance perspective, there is ongoing concern about corruption and bribery in an industry where securing rights and permits often depends on building relationships with public officials.
Uncovering potential ESG exposures is therefore vital for companies pursuing M&A transactions – despite the Trump administration’s pivot on ESG factors somewhat muddying the waters. Even the largest deals are not immune; the difficulty of reconciling Glencore’s coal assets with Rio Tinto’s net-zero emissions targets, for example, was one reason that merger talks broke down.
But the debate is nuanced. PwC’s Alan MacPherson points out that while many mining companies have backed away from coal in recent years, Glencore has done well from keeping such assets. “Investors have woken up to the fact that these issues are complicated,” he says. “Even leaving aside energy, lots of steel is produced using metallurgical coal – and without steel, you can’t build green assets such as windfarms.”
Funds to come?
One interesting question is whether we’re about to see PE take a much more active interest in the mining sector. Despite the broader increase in M&A activity, PE firms’ participation in mining deals has remained relatively flat over the past three years. But that might begin to change, argues Naathen.
“The diversified mining groups and focused independents will continue to dominate in markets such as copper,” he says. “But as they review their portfolios and identify non-core assets, that may create opportunities for others.”
Fundraising activity has begun to reflect this. PE firm Appian Capital Advisory recently announced the launch of a $1bn fund, in conjunction with IFC Asset Management, to invest in critical minerals, metals and mining-related projects, and alternative investment groups are also raising funds targeting the industry.
Lots of steel is produced using metallurgical coal – and without steel, you can’t build windfarms
But more PE involvement could be hampered by mindset. “The traditional PE model is about looking for businesses that can be improved operationally, but also those which have predictable and reliable cash flows,” says MacPherson, “so that’s a gap for firms to figure out in mining.” One approach, he suggests, would be to develop longer-term funds that look through short-term volatility to provide more patient capital.
With the M&A boom set to continue for some years yet, there will be time for PE players to work it out. “Mining companies are doing deals because of some really major structural shifts that have come to a head over many years,” says Downham. “A lack of exploration success across the industry is forcing companies to think hard about portfolios and the extent to which they have growth options in those commodities that have looming supply deficits.”
Banking on batteries
Seen in the context of the huge deals going through in the global mining sector in 2025, Cornish Lithium’s announcement last September that it had secured £35m of new investment looked small beer. But the transaction is hugely significant – and not only for Cornwall’s mining industry, which looked to have disappeared when tin mining came to an end decades ago.
Supplies of the metal – a critical component of the lithium-ion batteries found in everything from smartphones to electric vehicles – have lagged demand, prompting anxiety that the transition to clean energy could be derailed. Discovery of commercially viable deposits of lithium in Cornwall has, therefore, turned heads in Westminster. Of the £35m raised by Cornish Lithium last September, £31m came from the state-backed National Wealth Fund, with TechMet, a privately owned business focused on critical minerals, providing the rest. The National Wealth Fund (then operating as the UK Infrastructure Bank) had previously led a £54m investment in Cornish Lithium in 2023.
By 2035, Cornish lithium mining is expected to be producing 50,000 tonnes of the metal a year, sustaining several thousand local jobs. For one of the country’s most economically deprived areas, that’s a particularly welcome fillip.
