USA Rare Earth Acquires Brazilian Rare Earth Miner Serra Verde for $2.8 Billion
In January 2024, Serra Verde commenced commercial production of Mixed Rare Earth Concentrate (“MREC”) from Phase I of its Pela Ema deposit in Minaçu, Goiás State, Brazil. Photo: Serra Verde Group.
Key Points
- USA Rare Earth (Nasdaq: USAR) has agreed to acquire 100% of Serra Verde Group for approximately $2.8 billion, comprising $300 million in cash and 126.849 million newly issued USAR shares.
- Serra Verde’s Pela Ema mine in Goiás, Brazil, is the only scaled producer outside Asia of all four magnetic rare earth elements (Nd, Pr, Dy, Tb), with a 20+ year mine life and Phase 1 capacity of approximately 6,400 metric tons TREO per year.
- Serra Verde holds a 15-year, 100% offtake agreement with a U.S. Government-capitalized special purpose vehicle, including contractual price floors for Nd, Pr, Dy, and Tb.
- Serra Verde is expected to generate $550-$650 million of annualized run-rate EBITDA by end of 2027; the combined company targets approximately $1.8 billion EBITDA by end of 2030.
- The deal is unanimously approved by both boards and expected to close in Q3 2026, subject to USAR shareholder approval and standard regulatory clearances.
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Deal Overview
USA Rare Earth, Inc. (Nasdaq: USAR) has entered into a definitive agreement to acquire 100% of Serra Verde Group, owner of the Pela Ema rare earth mine and processing plant in Goiás, Brazil. The announcement, made on April 20, 2026, marks the most significant step yet in USAR’s strategy to build a fully integrated, Western-aligned rare earth supply chain from mine to finished permanent magnet.
Serra Verde holds what the companies describe as a uniquely strategic position: it is the only large-scale producer outside Asia capable of supplying all four magnetic rare earth elements (neodymium, praseodymium, dysprosium, and terbium) simultaneously. These four elements are essential inputs to the neodymium-iron-boron (NdFeB) permanent magnets that power electric vehicles, wind turbines, robotics, drones, defense systems, and a wide range of other advanced industrial applications.
For USAR, which went public via de-SPAC in March 2025 and has since assembled an integrated platform spanning magnet manufacturing in Oklahoma, metal-making through Less Common Metals (LCM) in the UK and France, and the Round Top development project in Texas, the Serra Verde acquisition delivers the critical upstream mining anchor the company has been building toward. The combined entity would operate across three continents with capabilities spanning the entire rare earth value chain.
— Barbara Humpton, Chief Executive Officer, USA Rare Earth“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.”
Transaction Terms
The all-share-and-cash consideration consists of $300 million in cash and 126.849 million newly issued USAR common shares. Based on USAR’s closing share price of $19.95 on April 17, 2026, the share component is valued at approximately $2.5 billion, implying a total equity value for Serra Verde of approximately $2.8 billion. Following closing, USAR shareholders will own approximately 66% of the combined company, with Serra Verde shareholders holding approximately 34%.
| Term | Details |
|---|---|
| Transaction Value (Equity) | ~$2.8 billion |
| Cash Consideration | $300 million |
| Stock Consideration | 126.849 million USAR shares (~$2.5 billion at $19.95/share) |
| Pro Forma Ownership | USAR shareholders ~66% / Serra Verde shareholders ~34% |
| Pro Forma Liquidity | ~$3.2 billion |
| Regulatory Approvals | USAR shareholder approval; standard U.S. Hart-Scott-Rodino clearance |
| Expected Closing | Q3 2026 |
| Board Approval | Unanimously approved by both USAR and Serra Verde boards |
| Financial Advisor (USAR) | Moelis & Company LLC |
| Legal Counsel (USAR) | Latham & Watkins LLP |
| Financial Advisor (Serra Verde) | Goldman Sachs & Co. LLC |
| Legal Counsel (Serra Verde) | White & Case LLP |
What Is the Serra Verde Offtake Agreement?
Serra Verde holds a 15-year, USD-denominated offtake agreement with a special purpose vehicle (SPV) capitalized by various U.S. Government agencies and private capital sources. The agreement covers 100% of Serra Verde’s Phase 1 production of the four magnetic rare earths (Nd, Pr, Dy, Tb) and includes contractual price floors: $110/kg for both Nd and Pr, $575/kg for Dy, and $2,050/kg for Tb.
These floor prices are set well below current non-China spot prices (approximately $140/kg, $1,100/kg, and $4,000/kg for Nd/Pr, Dy, and Tb respectively). Serra Verde retains 70% of any realized price above the floor prices. Yttrium, which accounts for approximately 42% of Serra Verde’s revenue basket by value, is sold outside the offtake agreement and can be monetized separately.
The Serra Verde transaction also comes with a $565 million financing package from the U.S. International Development Finance Corporation (DFC), which fully funds Phase 1 optimization and expansion through to positive cash flow. This is in addition to USAR’s own $1.577 billion in commitments from the U.S. Department of Commerce (DOC) under a non-binding Letter of Intent announced in January 2026, bringing pro forma committed government financing to approximately $1.8 billion.
Strategic Rationale
The combination addresses what both companies describe as a structural gap in the Western rare earth supply chain: the near-total absence of scaled, ex-China production of heavy rare earth elements (HREEs). While light rare earths such as neodymium and praseodymium are increasingly available from Western producers such as MP Materials and Lynas, dysprosium and terbium remain almost exclusively sourced from China. Serra Verde’s ionic clay deposit at Pela Ema is uniquely rich in these heavy elements.
By adding Serra Verde’s operating mine, USAR immediately secures an upstream MREC (mixed rare earth carbonate) feedstock source for its separation facilities and provides the heavy rare earth inputs its Stillwater magnet manufacturing facility will require. The investor presentation notes that Serra Verde’s MREC is expected to supply USAR’s and Carester’s separation facilities, provide near-term HREE and LREE supply, and serve as potential on-specification feedstock for USAR’s magnet production.
— Thras Moraitis, Chief Executive Officer, Serra Verde Group“Rare earths represent a strategic nexus where national and energy security, and technological supremacy, converge. The Western rare earth sector stands at a critical inflection point, as governments and strategic industries urgently seek reliable sources of critical rare earths, particularly scarce heavy rare earths.
Over Serra Verde’s 15-year journey, our team has remained steadfastly focused on building a scaled, responsible source of these vital materials that power forward-facing technologies. Joining forces with USA Rare Earth accelerates the realization of our shared vision: establishing a secure, diversified global rare earth supply chain.”
The deal also substantially strengthens USAR’s leadership team. Thras Moraitis, current CEO of Serra Verde and a former senior executive at X2 Resources and Xstrata, will join USAR as President and as a Board Director. Sir Mick Davis, current Chair of Serra Verde and the former CEO of Xstrata plc who built the company from a $500 million business in 2001 to a $65 billion global mining major at the time of its sale to Glencore in 2012, will join the USAR Board of Directors. Ricardo Grossi, current COO of Serra Verde, will become President of USAR Brazil while continuing to lead on-ground operations at Pela Ema.
The combined company’s integrated platform compares favorably to existing Western rare earth producers. The investor presentation highlights that at a projected market capitalization of approximately $7.6 billion and a 2030E TEV/EBITDA multiple of approximately 3.6x, the combined USAR trades at a significant discount to peers including Lynas ($15 billion market cap, 10.6x multiple) and MP Materials ($14.3 billion market cap, 12.8x multiple), while offering a more complete value chain than either competitor.
The Serra Verde Asset
Serra Verde’s Pela Ema mine is located in the municipality of Minaçu in the State of Goiás, Brazil, an established mining jurisdiction ranked as the number one Latin American and Caribbean country on Investment Attractiveness and Policy Perception in the Fraser Institute’s 2025 Survey of Mining Companies. The mine uses open-pit strip mining to extract ionic clay deposits, a deposit type well-suited to efficient, low-impact extraction. Operations generate no wet tailings and use renewable electricity and biofuels, supporting a strong sustainability profile. Serra Verde has achieved over three years without a Lost-Time Injury.
Commercial production commenced in early 2024, following more than $1.1 billion in capital investment over 16 years. The deposit has a 20-plus year mine life (2026 to 2047) with Phase 1 nameplate capacity of approximately 6,400 metric tons of TREO per year. A potential Phase 2 expansion, which could approximately double run-of-mine production before 2030, is under consideration. The mine is fully permitted and its ramp-up is currently underway.
The value of Serra Verde’s output is notably concentrated in its heavy rare earth and yttrium content. By revenue, yttrium accounts for approximately 42% of the basket, with NdPr representing 22%, dysprosium 19%, and terbium 13%. This HREE-weighted basket is what gives the asset its strategic significance: by end of 2027, Serra Verde is projected to account for approximately 58% of total non-China dysprosium oxide supply, 39% of non-China terbium oxide supply, and 92% of non-China yttrium oxide supply.
The asset has been backed and developed by leading mining-focused institutional investors including Denham Capital, Vision Blue Resources, and the Energy and Minerals Group, providing additional operational credibility and institutional oversight throughout its development phase.
Financial Impact
Serra Verde is the primary near-term driver of USAR’s financial profile. At Phase 1 nameplate capacity, the company projects $550-$650 million of annualized run-rate EBITDA by the end of 2027, based on average TREO production (after lanthanum removal) of approximately 4,400 metric tons per year and an illustrative average TREO basket price of approximately $190/kg. This projection assumes 100% oxide sales (the higher-value product form); delivering mixed rare earth carbonate (MREC) form would generate $300-$400 million in the same period.
On a longer-term basis, the combined company is expected to generate approximately $1.8 billion of annualized EBITDA by end of 2030 (approximately $1.2 billion from USAR’s existing platform and approximately $650 million from Serra Verde), accompanied by a free cash flow conversion of approximately 80%.
Pro forma liquidity for the combined company is expected to reach approximately $3.2 billion, comprising USAR’s cash position as of March 31, 2026 ($1.75 billion), less the $300 million cash consideration and approximately $115 million in transaction expenses, plus $1.577 billion in commitments from the DOC under the non-binding LOI, $140 million in undrawn DFC debt commitments, $100 million in DFC convertible debt, and $96 million in Serra Verde cash as of March 31, 2026.
The transaction also includes approximately $1.8 billion in total committed debt and equity capital from the U.S. Government. Combined with USAR’s existing balance sheet, this positions the company to execute its full growth pipeline without requiring near-term equity dilution beyond the shares issued in the Serra Verde consideration.
Path to Closing
The transaction has received unanimous approval from both USAR’s and Serra Verde’s boards of directors. The only regulatory requirement beyond customary closing conditions is standard U.S. Hart-Scott-Rodino antitrust clearance; there are no requirements for regulatory approvals specific to the Brazilian transaction beyond those already in place for Serra Verde’s operating licenses. Closing is expected in Q3 2026.
The primary remaining condition is approval from USAR shareholders, for whom the share issuance of 126.849 million new shares represents meaningful dilution and will require a shareholder vote. Post-closing, USAR shareholders will hold approximately 66% of the enlarged company and Serra Verde shareholders approximately 34%.
— Thras Moraitis, Chief Executive Officer, Serra Verde Group“Together, we believe the combined company will deliver a fully integrated rare earth solution at scale, accelerate growth, and create enhanced value for all stakeholders, including shareholders, customers, employees, local communities, and governments spanning Brazil, the United States, and our Allies.”
The Serra Verde acquisition is the latest in a rapid sequence of strategic moves by USAR since its March 2025 de-SPAC listing. The company has announced the acquisition of LCM (November 2025), a partnership with the French Government to develop LCM Europe (November 2025), a $1.6 billion funding package from the U.S. Department of Commerce alongside a $1.5 billion PIPE (January 2026), a definitive agreement for the acquisition of Texas Mineral Resources Corp (March 2026), and a 12.5% equity investment in French rare earth processor Carester (April 2026). The Serra Verde deal, announced the same week as the Carester investment, represents the capstone of what has been a 13-month effort to assemble a mine-to-magnet platform at a scale not previously attempted outside China.
References
- USA Rare Earth, Inc., “USA Rare Earth Announces Definitive Agreement to Acquire Serra Verde Group for ~$2.8 Billion, Creating the Global Rare Earth Leader,” Press Release, April 20, 2026.
- USA Rare Earth, Inc., “Project Middlebury: USA Rare Earth + Serra Verde — The Global Leader in Rare Earths,” Investor Presentation, April 2026.