USA Rare Earth Acquires Serra Verde Group for $2.8 Billion
USA Rare Earth Inc. is making a significant move by acquiring Brazil’s Serra Verde Group in a deal worth approximately $2.8 billion. This acquisition aims to secure essential heavy rare earth elements that are vital for making magnets, supporting defense technologies, and aiding the global shift toward renewable energy.
Barbara Humpton, CEO of USA Rare Earth, expressed that this acquisition is a pivotal step in the company’s goal to become a leading player in the rare earth elements market, including oxides, metals, and magnets.
The heart of Serra Verde’s operation is the Pela Ema ionic clay rare earths mine, located near Minaçu in southcentral Brazil. This mine is rich in critical heavy rare earth elements like dysprosium, terbium, and yttrium, along with neodymium and praseodymium. These elements are key ingredients for neodymium-iron-boron permanent magnets, used extensively in automotive, defense, and high-tech industries. Humpton highlighted Pela Ema as “a unique asset,” being the only significant producer outside of Asia capable of supplying all four key magnetic rare earths at a large scale.
After investing about $1.1 billion over 15 years for exploration and development, Serra Verde commenced production at Pela Ema in 2024. Being one of the few projects producing a considerable amount of heavy rare earths not based in China, this operation has drawn significant attention and support from U.S. government agencies.
Thras Moraitis, CEO of Serra Verde, noted the strategic importance of rare earths, stating, “Rare earths are at the intersection of national and energy security, as well as technological excellence.” He emphasized the critical state of the Western rare earth sector as both governments and industries seek reliable and essential supply sources, especially for the rarer heavy rare earths.
In February, the U.S. International Development Finance Corporation granted Serra Verde a financing package of $565 million to help refinance existing loans and expedite the expansion of their operations at Pela Ema. Additionally, a 15-year agreement was secured with a U.S. government-backed entity for 100% of their production of neodymium, praseodymium, dysprosium, and terbium. This agreement helps stabilize prices and minimizes risks while offering more opportunities for profit.
With stable financing and contracts in place, Serra Verde plans to ramp up production at Pela Ema to its first phase capacity by the end of 2027, targeting an annual output of 6,400 metric tons of total rare earth oxides, including a majority of the heavy rare earths produced outside China.
For USA Rare Earth, this $2.8 billion acquisition connects Serra Verde’s important Brazilian asset to its growing global supply chain, which already includes projects in Texas, Oklahoma, the UK, and France.
The merger not only adds a crucial upstream asset but also enhances USA Rare Earth’s development and operational expertise. Humpton noted that integrating Serra Verde’s operations with their capabilities in processing and magnet-making will help establish a comprehensive platform for global rare earth supply security for years to come.
As Serra Verde progresses to commercialize Pela Ema, its experienced team is expected to assist USA Rare Earth in fast-tracking their mine development plans for Round Top, a rare earths project in Texas aiming for initial production by 2028.
Moraitis, who will become the president of USA Rare Earth, shared his enthusiasm for the collaboration, stating, “We’re excited to bring our operational knowledge and growth potential to this united platform.”
Under the agreement, USA Rare Earth will pay $300 million in cash and issue approximately 126.85 million shares valued at about $2.53 billion based on recent market prices. The deal is anticipated to finalize mid-year, positioning USA Rare Earth as a fully integrated supplier of critical rare earths and magnets outside of China.
