USA Rare Earth to Acquire Brazil’s Serra Verde’s for $2.8B

The Pela Ema Mine in Golas, Brazil, is the only operational mine in the Western Hemisphere that can produce four #RareEarths, notably #dysprosium, #terbium, #neodymium, and #praseodymium, that are much needed for defense applications. Thus, the US Department of War (DoW) approved a massive financial package worth USD 1.55 billion to support the takeover of the Serra Verde, the owner of the mine.

The cash is primarily destined for scaling up the extraction volume, ramping up the refining capacity, and upgrading the operations. The USD 1.55 billion package is broken down as follows: USD 750 million from the Pentagon, USD 500 million from institutional banks, and USD 300 million from the Defense Logistics Agency. In February 2026, US DFC already provided a USD 565 million loan facility to Serra Verde to refinance past debt and fund the expansion works at the Pela Ema Mine.

Actually, USA Rare Earth (NSDQ: USAR) is acquiring Serra Verde for a price tag of USD 2.8 billion, using a mix of cash and stock. Based on the details made public, USA Rare Earth will transfer 126.9 million shares to Serra Verde stakeholders, giving them roughly 34% in the venture.

Additionally, a US Government-backed Special Purpose Vehicle is to be created to lock in a 15-year forward offtake agreement and ensure that 100% of the mine’s heavy rare earths will go to the US for military and civilian use. Furthermore, the deal guarantees price floors for the rare earths to pre-empt any hostile intentions. Through DFC’s involvement, the US Government preserves the option to acquire a minority stake in the venture.

By some estimates, by 2027, the Pela Ema Mine is scheduled to ramp up its production to account for half of the world’s non-Chinese heavy rare earths, equivalent to 6,400 tonnes of rare earth oxides (TREO) annually. Currently, China is exercising tight control on the export of rare earths to the US, while the US is doing everything in its power to secure alternative sources.

As far as Brazil is concerned, President Lula da Silva reiterated that his country maintains a ‘neutral stance.’ At the same time, Brazil intends to push for local refining and local value addition (#LVA). On 28 August, a shareholder meeting of USA Rare Earth Inc. is scheduled in order to formally approve the deal. As usual, the takeover will go through regulatory approval from the authorities in both countries and is expected to close by the end of 2026.