USA Rare Earth (Nasdaq: USAR) announced this morning a definitive agreement to acquire 100% of Serra Verde Group — owner of the Pela Ema rare earth mine and processing plant in Goiás, Brazil — in a transaction valued at approximately $2.8 billion. The deal is structured as $300 million in cash plus 126.849 million newly issued shares of USAR common stock, based on the company’s April 17 closing price of $19.95.
The acquisition is expected to close in the third quarter of 2026, pending regulatory approvals and customary closing conditions.
This is not a routine tuck-in. It is one of the most strategically significant critical minerals transactions to emerge from the Western world in years — and the timing is deliberate.
Serra Verde’s Pela Ema operation holds a distinction that very few assets in the world can claim: it is the only scaled producer outside of Asia capable of supplying all four magnetic rare earth elements — Neodymium (Nd), Praseodymium (Pr), Dysprosium (Dy), and Terbium (Tb) — at meaningful commercial volumes. These are the materials that go into permanent magnets, which in turn power electric vehicle motors, wind turbines, defense systems, and advanced electronics. China currently controls the overwhelming majority of global rare earth production and processing. Serra Verde represents a direct challenge to that dominance.
The operation is fully permitted and entered production in 2024 after more than $1.1 billion in capital investment. At Phase 1 nameplate capacity — expected to be reached by the end of 2027 — the mine is projected to produce approximately 6,400 metric tons of total rare earth oxide per year and generate annualized EBITDA of $550 to $650 million. The combined company is targeting approximately $1.8 billion in EBITDA by 2030.
The financial structure of this deal is notable beyond the headline price. Serra Verde has already secured a $565 million financing package from the U.S. International Development Finance Corporation to fund optimization and expansion through to positive cash flow. It has also locked in a 15-year, 100% offtake agreement with a special purpose vehicle capitalized by various U.S. government agencies and private capital sources — with guaranteed minimum floor prices for each of the four magnetic rare earths. That government-backed revenue floor substantially de-risks the asset and signals how seriously Washington views rare earth supply chain security as a national priority.
By end of 2027, Serra Verde’s output is expected to represent more than 50% of total non-China heavy rare earth supply globally — a figure that underscores just how critical this asset is to Western supply chain independence.
For USAR, the transaction adds Serra Verde leadership to its board, including Chairman Sir Mick Davis and CEO Thras Moraitis, who will also become President of the combined company. Pro-forma liquidity for the combined entity stands at approximately $3.2 billion.
Moelis & Company acted as exclusive financial advisor to USA Rare Earth. Goldman Sachs advised Serra Verde.
For small-cap investors tracking the critical minerals space, this is the deal that has been anticipated for years — and it closed on one of the most strategically defensible assets available outside of China.
