Commodity cycle: ticking towards acquisition time

As an investor, focusing on acquisition makes sense at certain times in the mining cycle. I believe we’re on track to hit that in 2026.

My suggestion: Use this recent weakness hitting global markets as an opportunity; the commodity cycle is still turning upward.

If metal prices continue to rise into 2026, I expect we’ll start to see investor capital migrate into the junior mining space.

But if you want to make the most of this opportunity, it’s essential to recognise that capital tends to flow into the best projects first.

As momentum builds, sentiment naturally flows down the mining pecking order from the miners to the developers and explorers.

So, how can we be so sure?

Well, we’ve already seen Act I play out this year.

Many producers have logged a record year in terms of profits and share price performance.

I won’t distract you with a list of triple-digit gains being made across mining-focused exchanges like the TSX and ASX.

But producers across gold, silver, platinum, copper, and critical metals are performing well.

As metal prices rise, underlying profits swell. The cycle is turning.

So, what happens next as we head into 2026?

The critical point here is that mines are a depleting asset.

That means producers must continually have their eye on the future, which means finding or acquiring new assets.

Without future reserves coming into the portfolio, miners face an extinction-level event!

It’s as simple as that. And many do, sooner than most investors anticipate.

And the timeline for their demise tends to carry forward as producers ramp up production in response to rising commodity prices.

That's a key reason why I believe we’re approaching Act II of this cycle.

Let’s look at this idea further…

Late last week, the world’s biggest miner (BHP) made a surprise attempt to gate-crash one of the industry’s biggest-ever mining deals.

The major went all-in on a last-minute bid to buy Anglo American and prevent the $60 billion merger with Canada’s Teck Resources.

That was after BHP spent the last 18 months insisting it had moved past trying to grab hold of Anglo’s copper assets.

The entire ordeal lasted just three days. BHP walked away, again.

Yet this rather desperate, last last-minute bid for Anglo does send an important message to the market:

The majors are hungry for acquisition, and this has the potential to reach a higher level of anxiety at some point in 2026. Something real estate investors might dub "FOMO."

That’s because the list of genuine copper projects with lasting supply is diminishing across the globe. Acquisition options are limited for this important commodity.

So, how should an investor position for this?

As investors, we’re primarily interested in the ‘A’ side of M&A... In other words, acquisitions.

Most people probably know this involves a bigger fish hunting down a smaller player, like BHP’s repeated attempts to buy out Anglo over the last two years.

But WHY do these miners pursue smaller companies?

Typically, it’s for growth.

If a company sees greater value in growing its portfolio over share buybacks or dividend payments, it may turn to acquisitions to strategically increase its exposure to a particular commodity.

In terms of the BHP example, the major hasn’t been shy about its desire to increase its leverage to copper mining.

But as deals become more competitive, as we witnessed last week, the price tends to increase for the prospective buyer.

That’s why it pays to look at the M&A opportunity just as commodities start to tick higher, like we’re seeing play out right now.

We’ll look at this in more detail over the coming weeks.

Stay tuned.