(April 20): USA Rare Earth Inc agreed to acquire Brazil’s Serra Verde Group in a cash-and-stock transaction, adding to a string of recent deals in the industry.
The US company said Monday it will pay US$300 million (RM1.18 billion) in cash and issue about 126.8 million shares to buy Serra Verde, which owns a large rare-earth mine in Brazil. The offer values the target at about US$2.8 billion, according to a statement.
The transaction, expected to close in the third quarter, comes as the US and its allies scramble to secure alternative supplies of rare-earth elements, a market long dominated by China. The minerals are used in high-strength magnets employed in consumer electronics, cars and defence systems.
The recent dealmaking underscores a global push to build rare-earth capacity after China last year threatened widespread industrial shutdowns by restricting exports. In January, America’s Energy Fuels Inc made a US$299 million bid for Australian Strategic Materials Ltd to build a “mine-to-metal” supply chain for the critical commodities.
USA Rare Earth, which already owns a mineral deposit in Texas, is betting the Serra Verde acquisition will help it build a vertically integrated platform spanning mining, separation, metallisation and magnet manufacturing. The Brazilian company operates a large ionic clay deposit capable of producing key rare-earth magnets including scarcer heavy elements.
The mine is a “one-of-a-kind asset and the only producer outside Asia capable of supplying all four magnetic rare earths at scale”, USA Rare Earth CEO Barbara Humpton said in the statement.
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