By Eric Onstad and Ernest Scheyder
April 20 (Reuters) – USA Rare Earth said on Monday it will buy Brazilian rare earths miner Serra Verde in a cash-and-stock deal worth $2.8 billion, the latest in a string of acquisitions boosting the company’s mining, processing and magnet-making portfolio.
In less than a year, USA Rare Earth’s international acquisition spree has seen it add British rare earths metals and alloy producer Less Common Metals and a stake in French processing firm Carester to its magnet manufacturing plant in Stillwater, Oklahoma, and its Round Top Texas mine.
The latest buyout, which comes after the U.S. Commerce Department took a stake in USA Rare Earth in January, will give the company control of Serra Verde’s Pela Ema mine, which is rich in heavy rare earths, unlike many other Western deposits, making it particularly attractive.
The deal “represents a transformational step in delivering on our ambition to build a global champion and the partner of choice in rare earth elements, oxides, metals and magnets,” USA Rare Earth CEO Barbara Humpton said.
Forecast shortages of heavy rare earths dysprosium and terbium could be a stumbling block in the West’s scramble to create domestic supply chains of rare earths and permanent magnets vital for the energy transition, electronics and defence applications.
China currently accounts for about 90% of global processed rare earth output, allowing it to largely control prices.
USA Rare Earth will pay $300 million in cash and 126.9 million in its own newly issued shares for Serra Verde, with the deal expected to close in the third quarter of 2026, a statement said.
The company agreed to a $1.6 billion debt-and-equity funding package with the U.S. government in January, while privately held Serra Verde agreed a financing deal worth $565 million with Washington in February.
The U.S. group’s Oklahoma magnet plant is expected to launch later this year.
Shares of USA Rare Earth jumped 9% in afternoon trading.
OFFTAKE DEAL
Serra Verde will receive a guaranteed price for its output, helping the combined company weather volatile rare earth prices.
The offtake is part of a 15-year supply agreement for 100% of Serra Verde’s production with a special purpose vehicle (SPV) capitalised by the U.S. government and private sources. The SPV will be able to sell the offtake to whomever it likes, including back to USA Rare Earth itself to make parts for magnets.
Serra Verde’s mine launched commercial production in early 2024, and has not yet hit full output, which is expected to be about 6,400 metric tons of total rare earth oxides a year by 2027.
With the takeover, Serra Verde CEO Thras Moraitis will become president of USA Rare Earth and join its board, while chair Mick Davis, the former head of Xstrata, will also join the board.
Serra Verde’s current owners – which include private equity groups Denham Capital, Energy and Minerals Group and Vision Blue – will hold 34% of the combined company.
(Reporting by Eric Onstad; Editing by Toby Chopra, Kirsten Donovan and Nick Zieminski)
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