USA Rare Earth has agreed to buy Serra Verde’s rare earth mine in Brazil for $2.8 billion. The nearly all-stock acquisition connects one of the best sources of heavy rare earth ore outside Asia to USA Rare Earth’s expanding portfolio of processing technologies.
Rare earths are used to make magnets for electric motors. Demand is rising quickly thanks to the growth of electric cars, robotics, and renewable energy. To produce the magnets, the light rare earths neodymium and praseodymium are alloyed with iron and boron. But to function at the high temperatures in a motor, magnets also need a small amount of heavy rare earths like dysprosium and terbium.
The ore at mines operated by companies including MP Materials in the US and Lynas Rare Earths in Australia are rich in light rare earths. But in 2025, the US, Australia, and Brazil mined only 8% of the world’s heavy rare earths, according to data from the minerals research firm Adamas Intelligence. The bulk of heavy rare earths came from mines exploiting ion-adsorption clays in China, Myanmar, and Laos.
Serra Verde is the first project outside Asia to start mining heavy rare earths from ion-adsorption clay. The company started production in 2024 and hopes to mine enough ore to make 6,400 metric tons of total rare earth oxides by the end of 2027.
While the commissioning process has been bumpy, Serra Verde’s big appeal is that it’s already operating, says Christopher Williams, a rare earth analyst at Adamas Intelligence. USA Rare Earth has “chosen the lowest-risk options on the table, which are producing companies,” he says.
Combined with USA Rare Earth’s recent investment in the rare earth processing firm Carester, the Serra Verde acquisition gives USA Rare Earth a potential path to extract ore rich in heavy rare earths and process them into materials for magnets, executives emphasized on an April 20 investor call.
“When the Carester facility comes on line later this year, it will lead the Western world in heavy rare earth separation,” USA Rare Earth CEO Barbara Humpton said on the call. “Today, we secure the upstream anchor.”
Serra Verde helps provide one of the missing pieces in the non-Chinese magnet supply chain, but USA Rare Earth and its partners still have to prove that they can successfully separate those ores, warns David Riley, a rare earth analyst for the intelligence firm Wood Mackenzie.
“The mining side is pretty straightforward,” Riley says. “The processing is the critical point in the chain that’s lagging behind.”
2026 American Chemical Society
