USA Rare Earth has agreed to acquire Serra Verde, the owner of a rare-earth mine and processing plant in Brazil, in a $2.8 billion deal announced this week.

The acquisition would strengthen USA Rare Earth's mine-to-magnets supply chain as the company seeks to build rare earth production capacity outside of Asia. The deal involves purchasing the Brazilian rare earth mining operations, which include both extraction and processing facilities.

The transaction comes amid ongoing geopolitical tensions between the United States and China, which currently dominates global rare earth production and processing. Rare earth elements are critical materials used in manufacturing magnets for electric vehicles, wind turbines, and various electronic devices.

Serra Verde operates rare earth mining and processing operations in Brazil, representing one of the few significant rare earth projects outside of Chinese control. The acquisition would give USA Rare Earth access to these established operations as it works to develop alternative supply chains.

The deal is part of broader efforts by Western companies and governments to reduce dependence on Chinese rare earth supplies, which have become a strategic concern for industries ranging from renewable energy to defense manufacturing.