USA Rare Earth buys Brazil's Serra Verde in $2.8 billion deal

USA Rare Earth has moved to lock up Brazil’s Serra Verde in a $2.8 billion cash-and-stock deal, adding a heavy rare-earth mine in Goiás to a fast-growing portfolio built around a non-China supply chain from ore to magnets.

The company said it will pay $300 million in cash and issue 126.849 million newly issued shares for Serra Verde, with the transaction expected to close in the third quarter of 2026. The acquisition gives USA Rare Earth control of the Pela Ema mine and processing plant, one of the few large-scale sources of critical heavy rare earths outside Asia. Serra Verde says its deposit contains neodymium, praseodymium, terbium and dysprosium, the elements that matter most for permanent magnets used in electronics, defense systems and clean-energy hardware.

The deal deepens a broader buildout that already included the British metals and alloy producer Less Common Metals and a stake in the French processing company Carester. Taken together, those pieces move USA Rare Earth further along the value chain that connects mining, separation, alloying and magnet manufacturing, a chain still dominated by China. That dominance has long given Beijing leverage over processed rare-earth output, making supply diversification a strategic priority for Washington and for manufacturers that do not want to depend on a single source.

Public money has been threaded through the expansion at every step. USA Rare Earth received a January 2026 funding package that included up to $277 million in direct funding and up to a $1.3 billion senior secured loan, with reporting saying the federal government’s eventual stake could range from 8% to 16% depending on warrant exercise. Serra Verde separately secured a $565 million financing package from the U.S. International Development Finance Corporation on February 5, 2026, including an option for the U.S. government to acquire a minority equity stake. Serra Verde also announced a 15-year offtake agreement with guaranteed floor prices, a structure that could steady revenues in a volatile rare-earth market.

Serra Verde began commercial production in early 2024 and had said it was targeting annual output of about 5,000 tons of rare-earth oxide by 2026. USA Rare Earth’s Oklahoma magnet plant is expected to begin operations later in 2026, giving the combined company a clearer line from Brazilian ore to U.S. manufacturing. Barbara Humpton said the deal gives USA Rare Earth access to a mine that produces all four magnetic rare earths on a large scale. The question now is whether that scale translates into real resource security, or simply a larger company still waiting on the same bottlenecks in processing, permitting and financing.