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USA Rare Earth has agreed to acquire Brazil-based miner Serra Verde in a USD 2.8 billion deal comprising cash and shares, as part of its strategy to build an integrated rare earth supply chain. The transaction includes a USD 300 million cash component and equity issuance, with completion expected later this year. Serra Verde’s Pela Ema mine, one of the few sources outside Asia capable of producing key magnetic rare earths, strengthens supply security ambitions in Western markets. The acquisition follows recent US-backed funding support for both companies and aligns with efforts to reduce reliance on Asian supply chains for critical minerals.
USA Rare Earth has entered into an agreement to acquire Brazilian rare earths producer Serra Verde in a transaction valued at approximately USD 2.8 billion, marking a significant step in its effort to build an end-to-end rare earths ecosystem. Advertisement
The acquisition will be executed through a combination of USD 300 million in cash and the issuance of 126.9 million new shares, according to the company’s announcement earlier this week. The transaction is expected to close in the third quarter of the year, subject to regulatory approvals and customary conditions.
The deal is part of USA Rare Earth’s broader strategy to integrate mining, processing, and magnet manufacturing capabilities, positioning itself as a vertically integrated supplier in the global rare earth value chain. The move comes at a time when Western economies are actively seeking to reduce dependence on Asian markets for critical minerals used in advanced technologies, electric vehicles, and defence applications.
A key asset in the transaction is Serra Verde’s Pela Ema mine in Brazil, which has been described by the company’s leadership as a unique operation outside Asia capable of producing all four key magnetic rare earth elements at scale. The mine is particularly notable for its concentration of heavy rare earths such as dysprosium and terbium, which are essential for high-performance magnets but remain in limited supply globally.
Commercial production at the mine began in early 2024, with output expected to reach around 6,500 metric tonnes of total rare earth oxides annually by 2027. The asset’s ability to supply heavy rare earths at scale makes it strategically important, especially as supply shortages of these materials could pose challenges to Western efforts to establish domestic manufacturing ecosystems.
Separately, Serra Verde has entered into a long-term supply arrangement to provide its entire initial-phase production to a special purpose vehicle backed by the US government and private investors. This agreement reflects increasing government involvement in securing supply chains for critical minerals.
Both companies have recently secured financial backing linked to these strategic objectives. USA Rare Earth had earlier finalised a USD 1.6 billion debt and equity funding package supported by the US government, while Serra Verde entered into a USD 565 million financing arrangement with US-based stakeholders.
The acquisition is expected to enhance USA Rare Earth’s access to upstream resources while supporting its downstream ambitions in magnet manufacturing, thereby strengthening its position within the global rare earths sector.
Source - Reuters
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