USA Rare Earth Acquires Mine in Brazil

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Written by Amir Richani for IIR News Intelligence (Sugar Land, Texas)

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Summary

USA Rare Earth acquires one of the few heavy rare earth mines outside China for US$2.8 billion, a move aimed to counter Chinese market dominance.

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New Acquisition

USA Rare Earth (USAR) announced the decision to acquire Brazil's Serra Verde Group, owner of the Pela Ema rare earth mine and processing plant in Goias, Brazil, for US$2.8 billion. The deal includes US$300 million in cash and the remaining value in new shares at USAR, with the acquisition expected to be completed by 3Q2026.

The Pela Ema mine began operations in 2024 and will produce 6,400 tonnes of rare earth oxides per year by the end of 2027 over a 25 years mine life. The mine's significance lies in being the first-scale producer of heavy rare earths (HREE) outside Asia, capable of producing the four magnetic rare earths: Dysprosium (Dy), Terbium (Tb), Neodymium (Nd) and Praseodymium (Pr). According to Industrial Info Resources data, there is a potential expansion project in the works that could double rare earth oxides production to 13,000 per day, valued at US$200 million. Subscribers to the Industrial Info Resources Global Market Intelligence (GMI) Project Database can learn more by viewing the project report.

Serra Verde produces materials needed for high-tech components in automotive, renewable energy, electronics, robotics, defense, and aerospace industries.

In February, Serra Verde secured US$565 million in financing from the U.S. International Development Finance Corporation to optimize and expand the Pela Ema mine.

"The acquisition of Serra Verde 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. 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, together with other vital REEs, such as Yttrium. Serra Verde's global importance is evidenced by its 15-year offtake agreement with a special purpose vehicle capitalized by various U.S. Government entities, as well as private capital sources, for 100% of its Phase 1 Nd, Pr, Dy and Tb production," said Barbar Humpton, the chief executive officer of USAR.

Serra Verde is projected to generate US$550-US$650 million in annual earnings before interest, taxes, depreciation and amortization (EBITDA) by 2027.

Stronger Foothold

Serra Verde is among the few producing rare earths outside China. At Phase I peak, it will make up over 50% of HREE output outside China.

USAR's acquisition is a strategic step towards more solid operations. "Serra Verde gives USA Rare Earth access to an operational rare earth mine supply for its magnet and rare earth oxides projects in Oklahoma. It is having extending permitting issues at its Round Top project, which won't be online until late 2028 at the earliest." said Joe Govreau, Industrial Info Resources' Vice President of Research - Metals and Minerals. The Round Top is a 7.3 million-ton-per-year, US$290 million above-ground rare earth mine planned for West Texas. Subscribers can learn more by viewing the project report.

More importantly, the deal is a geopolitical step for the U.S. to lessen Chinese dominance by sourcing minerals from diverse suppliers and enabling local magnet production.

At the same time, USAR's acquisition could mark a larger U.S. investment in Brazil's resources. Industrial Info Resources is tracking 30 rare earth mining projects in Brazil worth US$2.82 billion.

Industrial Info monitors active Metals & Minerals projects to gauge project spending throughout the world to give a leg up to equipment and service providers and other related firms.

Key Takeaways

• USAR acquires Serra Verde for US$2.8 billion, gaining a leading rare earth asset.
• By 2027, Pela Ema will produce approximately 6,400 tonnes of rare earth oxides annually.
• Industrial Info Resources is tracking 30 Brazilian rare earth projects valued at US$2.82 billion.

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About Industrial Info Resources
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, Industrial Info Resources is tracking over 250,000 current and future projects worth $30.2 trillion (USD).