A mid-year report by Goldman Sachs outlines how M&A in critical minerals is accelerating, with companies adopting integrated mine-to-magnet strategies to secure supply chains amid surging demand from AI, electric vehicles, and the energy transition.
As the demand for rare earths and other critical minerals rises alongside technological growth, the report notes that financial activity is also increasing. Authors Andrew Timbers and Nicholas Smith, co-heads of metals and mining in the Americas at Goldman Sachs Banking & Markets, note that M&A, initial public offerings (IPOs), and US Government investment are accelerating as the US seeks to close the supply gap with China, currently the global leader in critical minerals supply and processing.
Copper has been trading at all-time highs in 2026. As previously reported, the metal is up more than 30% year-on-year, with expectations that it will remain a strong long-term theme for the mining industry.
Rare earth demand also continues to grow as the push to diversify supply chains and expand downstream processing, magnet manufacturing, separation, and other capabilities outside China remains strong.
In the report, the Goldman Sachs team discusses what’s driving deal activity across the sector, the impact of AI, and the importance of a mine-to-magnet strategy.
While copper is central to the buildout of AI data centres, Timbers notes that this is not a single-metal story. Single gigawatt-scale data centres can require up to 50,000 tonnes of copper for cabling and grid upgrades, while other minerals, including lithium and rare earths, are also key components.
The growing demand for critical minerals and rare earths is fuelling financing activity.
Smith notes that the rapid acceleration of electrification and data centres is driving competition for high-quality copper projects “at a fever pitch”.
“Developing a new copper mine can take 15 years or more from discovery to production,” Smith says.
“Acquiring existing projects or junior developers is the fastest way for mining majors to meet demand.
“We expect continued consolidation and M&A activity as mining majors try to acquire smaller operators.”
Copper consolidation accelerates
The merger between Teck Resources (NYSE:TECK) and Anglo American (LSE:AAL), expected to be complete between September 2026 and March 2027, will see the creation of a global copper producer with over 70% exposure to the metal.
As previously reported, the combined operations include copper, iron ore and zinc assets, with a portfolio of brownfield and greenfield copper development projects across established mining jurisdictions.
In late June 2026, Hudbay Minerals (TSX:HBM) closed the acquisition of Arizona Sonoran Copper through a court-approved plan of arrangement, a deal the companies say will create the third-largest copper district in North America.
Hudbay notes that the acquisition strengthens the company’s strategic US footprint, with the Cactus Project in Arizona expected to be a major producer of copper cathode, “positioning Hudbay as one of only a few operators capable of producing refined copper domestically and supporting the US critical minerals supply chain”.
More recently, Evolution Mining (ASX:EVN) has announced its acquisition of Carnaby Resources (ASX:CNB) for around $213 million, adding Carnaby’s advanced Greater Duchess Copper-Gold Project to Evolution’s regional copper growth pipeline, as previously reported.
While the copper industry is seeing a strong pipeline of M&A activity, Timbers notes that the rare earths sector is shifting toward vertical integration.
“To capture downstream value and bypass complex processing bottlenecks, companies are actively pursuing a mine-to-magnet strategy,” Timbers says.
“This has triggered a wave of strategic M&A and joint ventures — some heavily backed by Western governments — specifically targeting heavy rare earths like dysprosium and terbium that have been impacted by tightening export restrictions.
“The goal is clear: Build a fully integrated, resilient supply chain to support and secure the domestic industrial base.”
Mine-to-magnet strategies drive REE consolidation
Mine-to-magnet strategies vertically integrate the entire value chain, from extraction and separation to metallisation and magnet manufacturing. This allows developers to capture higher margins from downstream operations while bypassing midstream bottlenecks.
Timbers notes that this vertical integration is reshaping project finance.
“Given the high capital expenditure required for midstream refining, developers are increasingly leveraging public-private funding packages,” Timbers says.
“We are seeing deals involving traditional private equity, combined with government backing, as well as strategic offtake agreements that include price support mechanisms to mitigate market volatility.”
The authors note that M&A transactions are being funded through a combination of common stock, cash, and structured equity.
In April 2026, USA Rare Earth (NASDAQ:USAR) announced a definitive agreement to wholly acquire Serra Verde Group, owner of the Pela Ema rare earth mine and processing plant in Brazil, creating a globally significant rare earth leader.
As previously reported, the agreement includes US$300 million ($428 million) in cash and 126.849 million new issued shares of USAR common stock, implying a total equity value of around US$2.8 billion.
Serra Verde is expected to produce around 6,400 tonnes of total rare earth oxides per year. The company secured a US$565 million financing package from the US International Development Finance Corporation (DFC) in February 2026 to fund expansion initiatives. Serra Verde also has a 15-year, 100% offtake agreement to supply a special purpose vehicle funded through a mix of US Government entities and private capital.
The company is expected to represent more than 50% of ex-China production of heavy rare earth elements by 2027. The Pela Ema mine and processing plant is also expected to contribute significantly to the global rare earth supply chain through processing, separation, metallisation, and magnet making.
In June 2026, Energy Fuels (TSX:EFR) announced a definitive agreement to wholly acquire Vacuumschmelze (VAC) in a US$1.9 billion cash-and-stock deal, creating a fully integrated rare earth supply chain platform, as previously reported.
The acquisition will see Energy Fuels’ upstream rare earth element assets combine with VAC’s downstream magnet manufacturing expertise.
Concurrently, Energy Fuels is moving ahead with its proposed acquisition of Australian Strategic Materials (ASX:ASM), subject to shareholder approval, which will provide the company with commercial-scale rare earth metals and alloys capacity in South Korea.
These transactions create the potential for Energy Fuels to expand its capabilities across the rare earth value chain. This includes its mine in Australia, processing and separation at the White Mesa Mill in the US, metals and alloy production in South Korea, and magnet manufacturing at the Sumter facility in the US.
The accelerating pace of copper and rare earths M&A underscores how miners and juniors are repositioning for AI-driven infrastructure growth and the broader energy transition.
As majors move to secure assets in stable jurisdictions and vertically integrate their supply chains, deal-making is expected to remain a defining feature beyond 2026.
Write to Amy Rotman at Mining.com.au
Images: Teck Resources, Hudbay Minerals
