CADE says it needs to determine whether the deal constitutes a "concentration act."
The General Superintendence of Brazil’s Administrative Council for Economic Defense (CADE) has opened proceedings to investigate the sale of Serra Verde Pesquisa e Mineração to U.S.-based USA Rare Earth, finalized in April for US$2.8 billion.
According to CADE, the goal is to assess whether the transaction and a supply agreement signed by Serra Verde constitute a concentration act and whether they should have been submitted to antitrust authorities. The Brazilian company said it would not comment on the case.
The two companies decided to create a rare earth multinational with eight operations in Brazil, the United States, France and the United Kingdom, operating across the entire production chain, from mining to magnet manufacturing.
In addition, Serra Verde announced a 15-year contract to supply 100% of the initial production from its mine to a special-purpose company funded by the U.S. government and private sources.
CADE said the opening of the investigation does not necessarily mean there are irregularities or competition concerns. At the end of the review, the agency may close the case, approve the operation or open administrative proceedings.
Serra Verde is currently the only rare earth mining company in Brazil and operates a mine in northern Goiás state. According to USA Rare Earth, local production could account for more than half of the world’s supply of heavy rare earths outside China by 2027.
The case comes amid U.S. efforts to reduce dependence on China in this strategic market.
Source: Folha de S. Paulo
