The “Greenfield” Trap
For a century, the mining business model was simple: Find a deposit, dig a hole, and profit. But the 2026 Bain report exposes a terrifying new economic reality: The cost of digging the hole has exploded.
We are facing massive supply deficits by 2035 - 15% in copper and 10% in lithium. Logic dictates a boom in new mine construction. Instead, we are seeing a boom in M&A. Why? Because the capital intensity of building a new mine has become prohibitive. The report notes that the capital cost per unit for Lithium projects has roughly quadrupled from the 2010s to the 2024-2030 forecast.
The non-obvious insight: M&A is no longer about growth; it is about arbitrage. It is currently cheaper to buy a rival’s existing, permitted mine on the stock market than it is to navigate the ESG nightmare and inflation required to build a new one from scratch. Exploration has been replaced by procurement.
The Neighbor Premium
The report highlights a shift in “Synergy Science.” In most industries, synergies are about firing the HR department. In mining, the real money is in Regional Hubs.
Take the proposed Anglo American and Teck Resources merger logic. Two-thirds of the $2.2 billion in synergies weren’t corporate cuts; they were operational. By combining adjacent mines in Chile, they could share the same crushing plant, the same railway, and the same water pipe.
The insight here is that “Global Diversification” is out; “Hyper-Localization” is in. Investors should look for companies buying their neighbors. If you own the mine next door, you aren’t just a competitor; you are the only logical buyer.
Buying the Method, Not Just the Metal
Finally, look at Evolution Mining. They didn’t just buy the Northparkes mine for the copper; they bought it for the block caving expertise.
Mining is becoming a tech game. Some ores are “stranded” because they are too expensive to extract with standard methods. By acquiring a company that has mastered a specific niche technique (like block caving), you can unlock value in your own portfolio that was previously zero. In 2026, you don’t just buy assets; you buy the engineering handbook that makes them profitable.
Read complete report from Bain here - It’s Time for Mining Companies to Get More Serious About M&A