On Wednesday, Rio Tinto (ASX:RIO) upped the ante in its attempt to acquire the entire Turquoise Hill Resources it does not already own, offering an additional $400 million in cash.

With the intention of gaining direct ownership of the large Oyu Tolgoi copper-gold mining project in Mongolia, Rio Tinto’s new offer means Turquoise Hill’s minority shareholders would receive $40 per share. The board of Turquoise Hill, a company that owns 66% of one of the world’s largest copper and gold deposits 550 km south of Mongolia’s capital Ulaanbaatar, said the company’s board is reviewing the proposal now.

After appointing an independent committee to determine if the offer was in the best interests of minority shareholders, last week the Canadian company rejected it as too low. They had received an offer of $26.57 per share back in March. Rio’s first offer was met with dissent from some of its largest shareholders, Turquoise Hill, including activist investor Pentwater Capital Management (with a 10% stake) and SailingStone Capital Partners (2.2% stake).

Copper’s demand is projected to increase as the world transitions away from fossil fuels. This is because copper wiring is necessary for electric vehicles, charging stations, and other renewable energy infrastructure. The increased bid reflects this potential value.

Turquoise Hill’s stock shot up in trading Wednesday on news of the increased bid.

Rio’s improved offer is contingent on Turquoise Hill not raising more than $1 billion in equity to pay for the project. Rio has committed to providing interim debt financing worth up to $400 million for the project.

Rio Tinto’s offer also reflects an M&A environment that is trying to keep up with demand through acquisitions. One of the biggest factors affecting the industry right now is the lack of new projects when demand is growing. This has created an environment of rising prices, which is encouraging consolidation.

It is also encouraging companies to increase production by any means necessary, even if it means reopening old mines or taking on more debt. In the case of Rio Tinto’s offer for Turquoise Hill, the company is willing to take on more debt to increase its ownership stake in a project with high potential. This is a sign that companies are becoming increasingly desperate to secure resources and output for the future.

The above references an opinion and is for information purposes only. It is not intended to be investment advice. Seek a licensed professional for investment advice. The author is not an insider or shareholder of any of the companies mentioned above.