Energy Fuels to buy Germany’s VAC as rare earths magnet race heats up

Reuters | June 23, 2026 | 4:41 am Critical Minerals Suppliers & Equipment Europe USA Rare Earth Uranium

Vacuumschmelze’s plant in Malaysia. Credit: Vacuumschmelze

Rare earths producer Energy Fuels will buy Germany’s Vacuumschmelze in a $1.9 billion cash-and-stock deal to become one of the world’s largest non-Chinese producers of magnets used in the aerospace, defence and renewable energy sectors.

US-based Energy Fuels is joining the race to capitalize on efforts by Washington and allies to wean themselves off market leader China, which has curtailed exports of critical minerals as trade tensions with the West have intensified.

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G7 leaders said last week that they aim to reduce dependence on any one supplier for rare earths and permanent magnets to less than 60% by 2030, with an ultimate goal of 50%.

Energy Fuels, a producer of uranium for the nuclear power industry, said it will pay private equity firm Ara Partners $718 million in cash plus 65.853 million newly issued Energy Fuels common shares for Vacuumschmelze, also known as VAC.

Shares in Energy Fuels fell as much as 6.2% in premarket trading and were last down 2.3%.

Century-old magnet producer

VAC is more than 100 years old and supplies magnets to more than 1,000 customers, including General Motors, from facilities in Germany, the US, Malaysia and other countries.

While the likes of MP Materials and USA Rare Earth have built their own magnets businesses, Energy Fuels preferred to buy an existing producer, CEO Ross Bhappu told Reuters.

“This is not an easy business to get into. It’s not an easy one to understand,” said Bhappu, who took the helm in April.

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“It also takes a long time to get customer acceptance of those magnet products. VAC has that customer acceptance.”

Ara Partners will become one of the largest Energy Fuels shareholders with a roughly 20% stake and a seat on the board when the deal closes early next year.

Bhappu said that Energy Fuels intends to integrate VAC and its 3,600 workers, including CEO Erik Eschen, but keep the Vacuumschmelze brand name.

Existing VAC plants, including one in China, will stay open, with expansions planned for a facility that opened late last year in South Carolina, Bhappu added.

(By Pooja Menon and Ernest Scheyder; Editing by Tasim Zahid and David Goodman)