LONDON, April 20 (Reuters) – Brazilian rare earth miner Serra Verde, which announced on Monday an agreement to be acquired by USA Rare Earth, will receive price floors for four rare earths in a 15-year supply agreement with the US government and private investors, according to a presentation on the topic.
Critics have said the price floors, which aim to level the playing field with China, the dominant producer of rare earths, have the potential to distort the market.
China is responsible for about 90% of global production of processed rare earths, while the US, Europe and other Western nations are racing to build their own domestic rare earth sectors, vital for the energy transition, electronics and defense applications.
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Last year, the US government for the first time offered a price floor to MP Materials, which controls the only operating rare earths mine in North America, as part of a multibillion-dollar support and financing agreement.
Serra Verde said on Monday it had reached a 15-year agreement to supply all production from the first phase of its mine to a special purpose vehicle capitalized by the US government and private sources.
The supply agreement includes price floors for the four main rare earths needed to make permanent magnets — neodymium, praseodymium, dysprosium and terbium — used in electric vehicles, wind turbines, drones and fighter jets.
The minimum price for neodymium and praseodymium (NdPr), which are often supplied as a joint product, is the same as MP Materials: US$110 per kilogram, according to the presentation.
The Chinese price of SMM-REO-DIO NdPr oxide has nearly doubled since the US government offered a price floor to MP Materials and was at 795,000 yuan per tonne, or US$117 per kg, up from US$63 on July 9, 2025, when the MP Materials deal was announced.
The Serra Verde mine is rich in heavy rare earths, unlike many other Western deposits, and the agreement included minimum prices for dysprosium and terbium of US$575 and US$2,050 per kg, respectively.
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The company and the US special vehicle will share 70% of the additional gains if the market price outside China rises above the floor prices, he added.
(Reporting by Eric Onstad)
