Energy Fuels (TSX:EFR) has announced a definitive agreement to wholly acquire Vacuumschmelze (VAC) in a US$1.9 billion ($2.74 billion) cash-and-stock deal, creating a fully integrated rare earth supply chain platform.
VAC is a global leader in advanced magnetics, with capacity to produce 2,000 tonnes per annum of permanent magnets, scalable to 12,000 tonnes per annum. The company has produced and shipped more than one billion rare earth permanent magnets over the past decade.
VAC has a portfolio spanning both permanent magnets and soft magnetics, which Energy Fuels says allows for cross-selling opportunities across electrification and industrial applications.
The transaction combines Energy Fuels’ upstream rare earth element assets, including its existing separation facility, with VAC’s downstream magnet manufacturing expertise. Energy Fuels says the consolidation will serve customers across North America, Europe, and Asia in high-growth sectors including defence, robotics, artificial intelligence data centres, and automotive.
Energy Fuels is also progressing its proposed acquisition of Australian Strategic Materials (ASX:ASM), subject to shareholder approval, which would add commercial-scale rare earth metals and alloys capacity in South Korea.
Energy Fuels CEO Ross Bhappu says the deal with VAC is transformational for the company and the global rare earths industry.
“Together with VAC, we will strengthen global rare earth and magnet supply chains, providing a reliable, secure, and diversified source of critical materials from mines to highly valued permanent magnets,” Bhappu says.
“The combination of our two companies provides enhanced shareholder value and positions Energy Fuels as a leading, secure, and trusted supplier for critical materials that are essential for national security and the safety and integrity of Western supply chains.”
Alongside the transaction, Energy Fuels has received a conditional commitment for up to $1.05 billion from the US Office of Strategic Capital through a 20-year loan to expand the White Mesa Mill in Utah and construct the American Metals Plant.
The company is also in discussions with Export Finance Australia for a $220 million loan to support development of Phase One of its Donald Rare Earth and Mineral Sand Project in Australia.
A globally significant transaction
The transaction between Energy Fuels and VAC is strategically significant because it creates a pathway for Energy Fuels to potentially become the first Western company with diversified capabilities across the rare earth value chain outside China.
This includes its mine in Australia, processing and separation at the White Mesa Mill in the US, metals and alloy production in South Korea, and magnet manufacturing at the recently commissioned Sumter facility in South Carolina, US.
VAC is currently the only commercial producer of permanent magnets in the US and Europe.
With demand for high-performance permanent magnets expected to grow over the coming decade, the combined platform could allow Energy Fuels to capture a greater share of Western supply chains serving defence, electrification, and advanced manufacturing sectors.
This transaction marks a milestone in the Western rare earth sector, as Energy Fuels builds a vertically aligned and geopolitically secure alternative within the rare earths ecosystem.
With additional support from US and Australian government financing, the company is building a rare earths platform aimed at supplying critical minerals to customers worldwide.
Write to Amy Rotman at Mining.com.au
Images: Energy Fuels
