Energy Fuels agreed to buy German magnet manufacturer Vacuumschmelze for $1.9bn, combining rare earth mining with downstream processing capabilities. The New York-listed company will pay $718mn in cash plus nearly 66mn shares, giving seller Ara Partners a 19.9 per cent stake in the combined entity.

The acquisition accelerates Western efforts to reduce dependence on China's rare earth supply chain, which Beijing has increasingly leveraged as a strategic tool. Rare earth magnets power everything from electric vehicles to fighter jets, making supply security critical for both commercial and defense applications.

Vacuumschmelze generated $29mn in adjusted earnings in 2025 excluding its new South Carolina facility, which should produce $130-140mn annually at full scale. The company holds over 400 patents and has supplied magnet materials to the Pentagon under a defense stockpile contract since 1921.

For Energy Fuels, the deal complements $725mn in US government financing for Utah facility expansion. This follows recent tensions in the sector, including MP Materials' allegations against USA Rare Earth over magnet technology theft. The transaction represents one of the largest bets yet on building domestic rare earths capacity.