The General Superintendence of the Administrative Council for Economic Defense (CADE) initiated an administrative procedure this Monday, May 11, 2026, to investigate a market concentration act involving Serra Verde Pesquisa e Mineração SA and USA Rare Earth, Inc. (USAR). The antitrust authority is examining whether the proposed combination of these two entities and a related long-term supply agreement constitute a merger that requires mandatory notification under Brazilian competition law.
The core of the investigation centers on the plan by Serra Verde and USAR to establish a fully integrated, multinational rare earth mining company. This venture, described as a “mine-to-magnet” operation, would encompass eight facilities across Brazil, the United States, France, and the United Kingdom. The combined company would possess operational capabilities across the entire rare earth supply chain—including mining, processing, separation, metallization, and the manufacturing of permanent magnets—covering both light and heavy rare earth elements.
In addition to the corporate combination, CADE is scrutinizing a 15-year supply agreement entered into by Serra Verde. Under this contract, Serra Verde would supply 100% of its Phase I production to a Special Purpose Entity (SPV). This entity is reportedly capitalized by several U.S. government agencies alongside private investors and includes guaranteed minimum prices for magnetic rare earths.
CADE’s General Superintendence is utilizing an Authorization for the Control of Competitiveness (APAC) procedure to determine if these acts meet the legal criteria for a mandatory merger filing. The investigation aims to verify the potential competitive impacts on the rare earth supply chain, a sector critical for high-tech industries, green energy, and defense.
The opening of this inquiry does not imply that a violation has occurred or that the merger will be blocked. Following the investigation, the General Superintendence will decide whether to close the case, authorize the operation as presented, or escalate the matter into a formal administrative process.
