A GLOBAL scramble for rare earths assets is intensifying, with US company USA Rare Earth alone striking four deals worth around $3bn in less than a year, said the Financial Times in an article on May 16.
This spate of dealmaking, from a company with no revenues, comes as Washington moves to reduce western dependence on China, the newspaper added.
USA Rare Earths secured $1.6bn in conditional US government funding which it will used to build a mine in Texas and a magnet factory in Oklahoma. Last month it announced a $2.8bn deal to acquire Serra Verde, which operates a mine and processing plant in Brazil. It also took a 12.5% equity stake in French rare earths processor Carester for €40m.
Earlier acquisitions include Less Common Metals, a UK oxide-to-metal processor bought for $217m, and Texas Mineral Resources Corporation in an all-stock deal.
“It is something of a land grab right now,” a mining lawyer told the Financial Times. “Everyone is trying to figure out how to get to scale and be the next winner.”
Rare earths are critical to the permanent magnets used in electric vehicles, fighter jets, wind turbines and mobile phones. China dominates the global supply chain from mining through to magnet production, while a lack of funding has long hampered western rivals.
Since Donald Trump returned to the White House, the US government has announced $18.6bn in committed and uncommitted funding to the critical minerals sector, the vast majority directed at rare earths, according to BMO analysts.
Colorado-based Energy Fuels is also pursuing acquisitions. Its CEO Ross Bhappu said companies with partial supply chain positions were keen to deepen their involvement.
Rebecca Campbell of law firm White & Case said a wave of deals including further vertical integrations was under way, though she cautioned that once western supply chains were filled, consolidation would follow.
