The resources sector is having one of those moments where executives talk about "strategic transformation" as commodity prices do their usual impression of a drunken sailor, and governments suddenly remember that maybe - just maybe - letting China control 90% of critical minerals processing wasn't the brightest geopolitical move of the past couple of decades.
Azzet’s Mission Critical is a weekly column that lays out the ebbs and flows around the critical minerals supply chains - from pricing, production, refinement and mergers & acquisitions, to manufacturing and consumer products.
But first… what's more critical than the AI race at the moment? Enter: energy deals…
Energy M&A
Constellation Energy's US$26.6 billion acquisition of Calpine Corporation stands as 2025's largest energy sector deal, creating America's biggest clean energy provider.
The January announcement combines Constellation's nuclear expertise with Calpine's natural gas and geothermal assets, spanning nearly 60 gigawatts of capacity across the continental U.S.
It's got an attractive acquisition multiple of 7.9x 2026 EV/EBITDA, with the combined entity positioned to serve 2.5 million customers.
A whopping 50 million Constellation shares plus US$4.5 billion cash suggests confidence in long-term power demand growth - particularly from AI data centres.
Constellation CEO Joe Dominguez says demand is at levels “not seen in a lifetime”.
Beijing's turn to twist the knife
Beijing made its most aggressive move yet to control rare earth supply chains, implementing sweeping new regulations on August 22 that expands its quota system to include imported raw materials.
It's a big mark up from simply controlling domestic production to now monitoring all rare earths flows through Chinese processors.
I must sound like a parrot to those who've been following this column, but the regulations are a big deal - because China controls ~70% of REE extraction and ~90% of global processing.
Find out more: Why China can keep weaponising REEs
There were early signs a couple of weeks ago, as China quietly issued its first 2025 rare earth mining and smelting quotas without the usual government statement, breaking with years of transparency around the cpmmodities.
Mixed commodity signals
Copper rose to US$4.45 per pound on August 22, though it remains 23.43% lower over the past month despite being 5.96% higher year-on-year.
Lithium showed better muscle, with prices rising 24% over the past month to 85,682.86 CNY/t, up 15.01% compared to the same period last year.
However, these gains haven't made up for lithium's 2022-2024 80% price collapse just yet.
Meanwhile, Targa Resources demonstrated sector resilience with an EBITDA of US$1.163 billion for Q2, benefiting from record Permian and NGL transportation volumes.
The company's aggressive expansion - including early completion of its Bull Moose II plant and a new US$1 billion share repurchase program - suggests confidence in its long-term gas processing demand.
Canadian Natural Resources surged 3.45% to $31.20 following sector-wide digital transformation momentum, with ExxonMobil's US$7.8 billion ChampionX acquisition and ProFrac's closed-loop fracturing technology driving investor optimism about operational efficiency improvements.
