U.S. rare earth company spends $2.8 billion to acquire Brazilian mining firm, positioning itself in the global rare earth supply chain.

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USA Rare Earth, an American rare earth company, announced a $2.8 billion acquisition of Brazilian rare earth producer Serra Verde, marking the largest rare earth industry merger to date and a key step in the U.S.'s efforts to build an independent rare earth supply chain.

According to the UK's Financial Times, USA Rare Earth announced Monday it has reached an agreement to acquire Serra Verde, which operates a mine and processing facility in Goiás, central Brazil. The deal will be completed through newly issued shares plus $300 million in cash, valuing Serra Verde's equity at $2.8 billion. Following the announcement, USA Rare Earth's shares surged 13% overnight, bringing its market value close to $5 billion.

USA Rare Earth CEO Barbara Humpton said the merged companies will create an integrated platform covering the entire supply chain for both heavy and light rare earths, including processing, separation, metallization, and magnet manufacturing, "which will serve as the cornerstone for global rare earth supply security for decades to come."

Serra Verde CEO Thras Moraitis will join the board of the merged group, and prominent mining figure Sir Mick Davis will also serve as a director.

Record-breaking deal

David Merriman, Research Director at mineral consultancy Project Blue, said the $2.8 billion valuation makes this deal the "largest merger in the rare earth industry by a significant margin so far."

The acquisition is structured with cash and stocks, including $300 million in cash, and the remainder paid in newly issued shares. The deal is expected to close later this year.

USA Rare Earth is headquartered in Oklahoma and listed on Nasdaq. The company plans to develop rare earth mining and magnet manufacturing businesses in the United States, though these have not yet reached commercial production.

Serra Verde: Brazil's only operational rare earth mine

Serra Verde's Pela Ema mine is currently Brazil's only operational rare earth production site. Barbara Humpton described it as a "unique asset and the only producer outside Asia capable of supplying all four magnetic rare earths at scale."

According to USA Rare Earth's projections, by 2027, Serra Verde's heavy rare earth output will account for about half of the total supply outside Asia. Heavy rare earths are rarer and more valuable than light rare earths.

Serra Verde has previously secured over $500 million in loans from the U.S. International Development Finance Corporation (DFC) and signed a 15-year supply agreement with a U.S. government-backed entity, including guaranteed minimum pricing terms.

Strong U.S. government endorsement

USA Rare Earth is a key bet by the U.S. government in building the rare earth supply chain. Washington has pledged up to $1.6 billion in financial support for the company, highlighting the Trump administration's focus on critical mineral supply security.

Rare earths refer to 17 metallic elements, widely used in electric vehicle magnets, renewable energy equipment, and weapon systems—core technologies of the 21st century—but their processing and refining is extremely complex.

Brazil holds rare earth resources second only to the world's top reserves, with large deposits still undeveloped, attracting significant international corporate and governmental attention. After the acquisition, USA Rare Earth will have both resource and processing assets, advancing toward full industry chain integration.

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