What are the macro forces shaping demand for energy and critical minerals?
Chris Redgate: We’re seeing a substantial build-out of North American LNG and AI datacenter gas-fired demand. That is driving significant investment and setting the stage for natural gas demand growth over the next decade.
We've also seen a return of international buyers seeking North American resource, and a scarcity of Tier 1 resource in the Lower 48 that is driving transaction activity and a renewed interest in Canadian resource.
Energy policy and a more supportive regulatory environment in Canada and the U.S. is creating the environment to drive significant investment in the coming years.
The Federal Government recently formed the Major Projects Office, which has been set up to streamline the regulatory process and really create the conditions to incentivize investment in LNG, energy infrastructure, power generation and transmission, critical minerals and mining projects and other strategic infrastructure.
The Canadian Government and the Province of Alberta recently signed an MOU that's the foundation for a potential million-barrel-a-day oil pipeline to the west coast, and the Pathways CCUS project that would be the world's largest. We see these tailwinds as very encouraging.
Farid Dadashev: Over the next 20 years, humanity is likely to need a lot more copper than we consumed over the past 10,000 years. We've seen governments take an equity stake in copper and rare earth mines on a new scale.
The need is to ramp up supply for multi-billion dollar projects with long lead times. Gone are the days when the companies were building the project by themselves: there has to be project syndication and risk sharing.
“Energy policy and a more supportive regulatory environment in Canada and the U.S. is creating the environment to drive significant investment in the coming years.”
Chris Redgate, Head of Canadian Energy Investment Banking
How are companies working to meet surging demand?
Craig Edgar: Power and utilities clients are considering how they can be ready to meet the ever-increasing need for capital and development. That means diversification of funding sources and power sources.
We're seeing the largest providers of private capital partnering up directly with the corporates that have the expertise to build datacenter power supply, and with the datacenter developers that need the supply. The U.S. government is leaning in to support companies through loan guarantees and other means.
Dadashev: If the core of a mining project is solid, there will be many funding options. We've seen many companies, even at early stage, funding projects through a gold or silver stream, which have provided very attractive cost of capital.
Funding these projects and buying equity stakes has become extremely competitive. We expect this trend to continue in 2026.
Redgate: We're seeing a lot more interest in integration across sectors and value chains. Buyers are integrating through the natural gas value chain, through long-term supply arrangements, partnerships and acquisitions amongst producers, mid streamers, LNG entities and off-takers, power producers, and datacenters.
Oil companies have been acquiring remaining Tier 1 inventory in the U.S., and many have been acquiring or evaluating opportunities beyond the Lower 48 to backfill inventory into the 2030s.
What role can tech innovations play?
Dadashev: After 30 years of research and development, Rio Tinto’s own Nuton technology, which harnesses bacteria to extract copper from primary sulphides, recently produced its first copper cathode.
This could be the beginning of an inflection point where technologies start playing a more pivotal role in helping us balance the copper market, which is extremely exciting.
Edgar: The pace of innovation in the broader power industry has increased. Most large utility companies are now working on using small modular nuclear reactor power. A lot of them have established internal VC functions to evaluate emerging technologies.
“This could be the beginning of an inflection point where technologies start playing a more pivotal role in helping us balance the copper market, which is extremely exciting.”
Farid Dadashev, Global Co-Head of Mining and Metals
What’s the outlook for M&A activity in 2026?
Redgate: In Canada, we've seen a resurgence of U.S. and international interest from private equity and strategics. 2025 saw a very notable increase in public corporate consolidation in Canada, a trend that we certainly expect to continue into 2026.
Edgar: Deal activity in power has been around capital allocation – whether that’s electric companies selling their gas subsidiaries to focus on electric growth, or large regulated companies divesting non-regulated businesses to reallocate capital to the core.
Strategics in the industry are partnering with sources of private capital. That has proven to be a major force for M&A activity in our space. Of late, we're starting to see a trend back towards corporate-to-corporate combinations: size and scale matter in very large projects.
Dadashev: 2024-2025 has been very busy for global mining M&A. Going forward, combinations with a strong strategic rationale, leveraging infrastructure or technical expertise to unlock value, are most likely to be pursued.
“Strategics in the industry are partnering with sources of private capital – that has proven to be a major force for M&A activity.”
Craig Edgar, Managing Director, Power, Utilities and Infrastructure
What are the potential risks to the outlook?
Redgate: We see very constructive tailwinds for oil and natural gas, but a range of scenarios and technological advancements could impact that longer-term outlook. I think that drives to the importance of companies built to withstand lower commodity prices.
Edgar: One risk is volatility reemerging in the capital markets, the cost of financing going up. I think that's where RBC can provide real leadership and advice – helping clients not only to meet energy demands, but to do so in a resilient way.
