USA Rare Earth Plans Brazil Deal for Heavy Rare Earths as China Controls 90% of Magnet Output
Updated
Updated · Foreign Policy · May 12
USA Rare Earth Plans Brazil Deal for Heavy Rare Earths as China Controls 90% of Magnet Output
10 articles · Updated · Foreign Policy · May 12
USA Rare Earth last month said it would acquire Brazil’s Serra Verde Group, which owns one of the few heavy rare-earth mines and a processing plant outside China.
The move targets a major U.S. vulnerability ahead of Trump’s summit with Xi Jinping: China dominates about 85% of rare-earth processing and more than 90% of magnet production, while the U.S. has no heavy rare-earth separation.
Brazil’s antitrust watchdog this week opened an investigation into the proposed deal, underscoring that even new supply-chain projects face delays before they can reduce dependence on Beijing.
That dependence matters more as the Trump administration expands military demands and stockpiling plans, with experts warning replenishing munitions will still require materials from a market where China holds a quasi-monopoly.
Analysts say diversification will take years even with billions in U.S. support, leaving Beijing’s export restrictions a potent lever in trade talks as a one-year truce nears its fall expiry.
Can America win the rare earth war if its production costs remain 70% higher than China's?
Is the U.S. overlooking a better strategy: inventing technology that no longer needs rare earths?
Breaking China’s Rare Earth Grip: USA Rare Earth’s $2.8B Serra Verde Acquisition and the Race for a Western Mine-to-Magnet Supply Chain
Overview
On April 20, 2026, USA Rare Earth, Inc. (USAR) announced it would acquire 100% of Serra Verde Group, which owns the Pela Ema rare earth mine and processing plant in Goiás, Brazil. The deal, valued at about $2.8 billion based on USAR’s recent share price, includes $300 million in cash and over 126 million new USAR shares. Expected to close in the third quarter of 2026, this acquisition is a major step for USAR, giving it direct access to critical rare earth resources and strengthening the Western supply chain for these essential materials.