USA Rare Earth will acquire Brazilian rare earth mining company Serra Verde for US$2.8 billion in cash and shares, the company said on Monday (20), in another step in its strategy to create an operation that includes mining, processing and manufacturing of magnets.
The U.S. company will pay $300 million in cash and 126.9 million in newly issued shares for the transaction, which is expected to close in the third quarter of 2026, according to a statement.
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Serra Verde also announced this Monday that it has entered into a 15-year agreement to provide 100% of production during the initial phase of its mine to a special purpose company capitalized by the US government and private sources.
In January, USA Rare Earth agreed to a $1.6 billion debt and equity financing package with the U.S. government, while Serra Verde, a private company, reached a $565 million financing deal with Washington in February.
“Serra Verde’s Pela Ema mine is a unique asset and the only producer outside of Asia capable of supplying all four magnetic rare earth elements on a large scale,” said Barbara Humpton, CEO of USA Rare Earth.
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Mine Rich in Heavy Rare Earths
Predicted shortages of heavy rare earths such as dysprosium and terbium could be a hindrance to Western efforts to create domestic supply chains for rare earths and permanent magnets.
The Serra Verde mine is rich in heavy rare earths, unlike many other western deposits, which makes it particularly attractive.
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The company began commercial production in early 2024 and has not yet reached full production, which is expected to be around 6,500 tons of rare earth oxides per year by 2027.
Serra Verde belongs to the private equity groups Denham Capital, Energy and Minerals Group and Vision Blue, led by the former president of Xstrata, Mick Davis.
USA Rare Earth shares fell 8% in pre-market trading, but as of the close of the latest trading session, they are up 68% for the year.
