The acquisition is intended to further advance the development of a fully integrated value chain.
USA Rare Earth (USAR) is acquiring Serra Verde, a Brazilian rare earths producer, the company announced on Monday (PDF), valuing the transaction at $2.8 billion.
CEO Barbara Humpton described the move as a key step toward building a global market leader. Serra Verde’s Pela Ema mine is the only operation outside Asia capable of supplying the magnet materials neodymium, praseodymium, terbium, and dysprosium at scale, she said.
At the same time, a 15-year supply agreement has been signed with a special purpose vehicle backed by the U.S. government and private investors. According to USAR, the contract includes minimum price guarantees for the four rare earth elements. Such mechanisms have recently been discussed and, in some cases, implemented by Western countries to improve the competitiveness of non-Chinese producers.
The acquisition marks the latest step in USAR’s strategy to build a complete value chain. The company plans to mine rare earths at its Texas deposit and manufacture rare earth magnets. To cover the intermediate steps, USAR acquired Less Common Metals last autumn, one of the few producers of rare earth metals and alloys outside China. More recently, the company also took a stake in the French firm Carester, which specializes in rare earth separation and recycling.
Earlier this year, the U.S. government invested in USAR and supported its plans to expand the value chain. Shortly thereafter, Serra Verde also received funding from the U.S. International Development Finance Corporation.
Photo: TRADIUM GmbH