A takeover that could reshape the rare earths industry?

USA Rare Earth (USAR) plans to acquire the Brazilian rare earth producer Serra Verde Group for USD 2.8 billion. This move could place USAR among the very few non‑Chinese companies capable of producing heavy rare earth elements.

The news of the potential acquisition was announced yesterday (April 20). Following the announcement, the company’s share price closed 13% higher at USD 22.58 per share.

Why does it matter?

Serra Verde owns the Pela Ema deposit, the only mine outside Asia that produces, on an industrial scale, all four key rare earth elements used in permanent magnets: neodymium (Nd), praseodymium (Pr), dysprosium (Dy), and terbium (Tb).

The resource base is large, and the deposit has room for expansion – the mine life is estimated at 25 years, with the potential to double production.

Serra Verde is considered a strategic component of Western supply chains, especially for wind turbines, electric vehicles, electronics, and defense applications.

A few days ago, Sprott launched a new ETF providing exposure to rare earth companies operating outside China.

It just so happens that USAR is the third‑largest holding in the REXC fund.

Finally, it’s worth recalling that earlier this year Donald Trump announced “Project Vault.” In short, it is intended to be a federally supported strategic stockpile of critical minerals (primarily metals), modeled after the Strategic Petroleum Reserve (SPR).

USAR – along with other companies developing strategically important REE assets in the United States – is expected to receive contracts and various forms of federal support. Companies such as Energy Fuels, which operate REE processing facilities, will likely process material sourced from Brazil (e.g., from Pela Ema).

A major trend – and one that’s worth keeping an eye on.