USA Rare Earth announced on Monday, April 20th, that they will acquire Brazilian rare earth mining company Serra Verde for a total of $2.8 billion in cash and stock, aiming to challenge China’s dominant position in the rare earth supply chain.
This acquisition is the latest in a series carried out by the company to strengthen its capabilities in mining, processing, and magnet production. Upon completion of the acquisition, USA Rare Earth will gain control of Serra Verde’s Pela Ema mine. Unlike many other Western deposits, the Pela Ema mine is rich in heavy rare earths, making it highly attractive.
The U.S. Department of Commerce invested in USA Rare Earth in January, highlighting the Trump administration’s emphasis on building a rare earth supply chain independent of China. Rare earth elements are crucial for manufacturing electronic products, laser-guided weapons, and advanced aircraft.
Amid ongoing geopolitical tensions between the U.S. and China, rare earths have become a significant bargaining chip with China controlling 70% of global rare earth production and 90% of processing.
Western officials have repeatedly pointed out that China’s dominance in the supply chain poses a strategic challenge, especially with the accelerated transition to clean energy and the anticipated exponential growth in demand for key minerals.
USA Rare Earth stated that the acquisition of Serra Verde is expected to be completed in the third quarter of 2026.
“There is excessive dependence on a single source globally, and now is the time to break that reliance,” said Barbara Humpton, CEO of USA Rare Earth, during an interview on CNBC’s “Squawk Box” on Monday.
She added that this transaction would allow the company to utilize a mine producing four types of magnetic rare earths, which will become a source for U.S. industrial needs.
Regarding the significance of the Brazilian rare earth mining company Serra Verde globally, Humpton noted that a 15-year purchase agreement has been signed with a Special Purpose Vehicle (SPV) made up of multiple U.S. government entities and private capital. This agreement covers the entire production of four magnetic rare earth elements (neodymium, praseodymium, dysprosium, and terbium) from Serra Verde.
These rare earth elements are crucial for the manufacturing of high-performance permanent magnets.
In response to the news of USA Rare Earth’s acquisition of Serra Verde, CEO Thras Moraitis told CNBC that the U.S. government has been actively promoting upstream investments, particularly in setting minimum rare earth prices.
He added in a statement, “Rare earths are a strategic pivot: where national security, energy security, and technological supremacy converge.”
“The Western rare earth industry is at a critical turning point, with governments and strategic industries all urgently seeking reliable sources of key rare earths, especially scarce heavy rare earths,” he said.
According to Reuters, Serra Verde’s mine began commercial production in early 2024 and has not yet reached full capacity. The annual output of rare earth oxides is expected to reach around 6,400 metric tons by 2027.
USA Rare Earth’s stock rose by 9% in Monday afternoon trading.