USA Rare Earth announced on Monday that it will acquire Brazilian rare earths producer Serra Verde in a transaction valued at $2.8 billion. The consideration comprises $300 million in cash and 126.9 million newly issued USA Rare Earth shares, with the deal expected to finalize in the third quarter of 2026.
The purchase brings to USA Rare Earth a mine notable for its heavy rare earth content - a characteristic that distinguishes the asset from many Western deposits. Heavy rare earths such as dysprosium and terbium are widely cited as potential chokepoints in efforts to build domestic supply chains for permanent magnets, which are used across the energy transition, electronics and defence sectors.
"Serra Verde’s Pela Ema mine is a one-of-a-kind asset and the only producer outside Asia capable of supplying all four magnetic rare earths at scale," USA Rare Earth CEO Barbara Humpton said, underscoring the strategic importance of the mine to the company’s integrated plans.
The acquisition expands a recent run of international moves by USA Rare Earth. Over the past year, the company has added British rare earth metals and alloy producer Less Common Metals and taken a stake in French processing firm Carester. Those deals complement USA Rare Earth’s magnet manufacturing plant in Stillwater, Oklahoma, and its Round Top mine in Texas.
Financing arrangements linked to the transaction and the wider corporate strategy are notable. USA Rare Earth agreed to a $1.6 billion debt-and-equity package with the U.S. government in January. Separately, privately held Serra Verde secured a financing agreement worth $565 million with Washington in February. As part of the acquisition, Serra Verde will receive price floors for its output through a 15-year supply arrangement that covers 100% of the mine’s production during its initial phase. The offtake will go to a special purpose vehicle capitalised by U.S. government and private sources - a structure intended to provide revenue stability amid volatile rare earth markets.
Serra Verde commenced commercial production in early 2024 and has not yet reached full output. The mine’s expected full run rate is about 6,400 metric tons of total rare earth oxides per year by 2027.
Leadership roles in the combined company were also announced. Serra Verde CEO Thras Moraitis will become president of USA Rare Earth and join its board. Mick Davis, the former head of Xstrata who serves as chair at Serra Verde, will join the USA Rare Earth board as well. Current owners of Serra Verde, which include the private equity groups Denham Capital, Energy and Minerals Group and Vision Blue, will retain a 34% stake in the merged entity.
Market reaction to the news was immediate. USA Rare Earth shares rose 14% in early trading, lifting the stock’s year-to-date gains to approximately 60%. The company’s Oklahoma magnet plant is expected to begin operations later this year.
Contextual note: The global processed rare earth market is currently concentrated in Asia; China accounts for about 90% of processed output, a market position that gives it significant influence over prices. Forecasted shortages of heavy rare earths such as dysprosium and terbium have been highlighted as potential obstacles in Western efforts to re-establish domestic supply chains for magnets and related technologies.