Serra Verde to boost output of scarce rare earths amid US deal

Brazil’s Serra Verde Group — the target of a $2.8 billion acquisition by USA Rare Earth Inc. — expects about one-third of its future production to come from heavy rare earth elements, a category currently dominated by China.

The company’s Pela Ema operation in Goiás is being upgraded and now produces roughly 100 metric tons of rare earth oxides each year, according to chief operating officer Ricardo Grossi. Production is expected to increase significantly, reaching about 6,400 tons annually by the end of next year.

A recent wave of deals underscores a global push to build rare earth capacity after China last year threatened widespread industrial shutdowns by restricting exports. Earlier this month, USA Rare Earth agreed to acquire Serra Verde in one of the largest deals in the industry.

Heavy rare earths are less abundant and more valuable than lighter ones. That’s prompting companies to expand production outside China, including in the US and South America.

For the expected output from Pela Ema, about 32% will be terbium and dysprosium — less common elements that are essential for high-performance magnets. The rest will include neodymium-praseodymium — at 22% — and yttrium — 42%, according to Grossi.

Serra Verde has signed a 15-year supply agreement with a US-backed partner. The deal sets minimum prices of $2,050 per kilogram for terbium and $575 per kilogram for dysprosium. Grossi said the materials will be sold only to Western markets.

The company is also considering carrying out part of the processing — known as oxide separation — in Brazil, with a final investment decision expected by early 2027.

“We’ve developed a pricing model that isn’t tied to highly volatile Asian benchmarks, which enhances revenue visibility” Grossi said, adding that the structure could help unlock other projects in Brazil.

(By Mariana Durao)