The race to secure the world’s most important minerals has taken a giant step forward as an American company makes a move to challenge international dominance. On Monday, USA Rare Earth (USAR) announced it has agreed to acquire Brazil’s Serra Verde Group in a deal worth $2.8 billion. This major news sent USAR shares up by more than 8.3% in pre-market trading as investors cheered the company’s sudden move to become a major supplier in the critical minerals market.
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The company is trading its status as a smaller player for a seat at the head of the global mineral supply chain.
The deal involves paying $300 million in cash and issuing over 126 million new shares to take control of Serra Verde. This is a huge win because Serra Verde owns the only producing mine in Brazil for rare earth elements. These minerals are the secret sauce used to build high-performance magnets for everything from electric cars to advanced defense systems. The U.S. and its allies are currently scrambling to find new sources for these materials to reduce their reliance on foreign markets that have recently restricted exports.
Government Funding Fuels the Move Toward a Mine to Metal Chain
The Oklahoma-based company is using significant financial backing to build a system where it controls every step of the process.
This acquisition is a remarkable turn for USA Rare Earth, which was trading as a penny stock not long ago. The company’s growth has been fueled by a $1.6 billion funding agreement with the Commerce Department signed earlier this year. The company is building a vertically integrated platform through the addition of the Brazilian mine to its existing deposit in Texas. This means they will now handle the mining, the chemical separation, and the final manufacturing of magnets all under one roof.
Furthermore, CEO Barbara Humpton stated that the Brazilian mine is the only producer outside of Asia capable of supplying all four of the specific magnetic elements needed for the world’s strongest magnets.
15-Year Supply Deal Secures the Future of American Magnet Production
The deal includes long-term promises that ensure the new materials will stay within a network of friendly nations and government agencies.
As part of the agreement, Serra Verde has signed a 15-year contract to supply all four key magnetic minerals to a special group funded by various government agencies and private investors. The Brazilian mine has already secured a $565 million loan from the U.S. International Development Finance Corporation to help upgrade its facilities.
With plans to ramp up production to 6,500 metric tons by the end of next year, the company is positioned to become a key link in the technology sector. The merger is expected to close in the third quarter of 2026.
Is USA Rare Earth a Good Stock to Buy?
Turning to Wall Street, analysts have a Strong Buy consensus rating on USA Rare Earth stock based on six Buy ratings assigned in the past three months. Furthermore, the average 12-month USAR price target of $32.60 per share implies 63.4% upside potential.
