Welcome back to CMJ,
Here are the 20-second highlights of what we’ll cover:
USA Rare Earth’s reported $2.8 billion acquisition of Serra Verde, backed by a 15-year government offtake and contractual price floors, would represent the first vertically integrated Western rare earth platform with government-backed pricing support for the exact elements where China exercises its greatest supply leverage
The U.S.–EU Critical Minerals MOU and accompanying Action Plan, signed April 24 by Secretary Rubio and Commissioner Sefcovic, are not symbolic. Explicit framing of border-adjusted price floors, coordinated stockpiling, and investment screening points toward the early architecture of a managed allied minerals market
TerraPower’s Natrium groundbreaking in Kemmerer, Wyoming marks the first utility-scale advanced nuclear reactor to begin construction in the United States, creating a demand signal for HALEU fuel the domestic supply chain is only beginning to build
The DOE’s ‘Nuclear Dominance — 3 by 33’ initiative invoked the Defense Production Act to mobilize more than 90 companies across the full nuclear fuel cycle by 2033, the most comprehensive federal intervention in the sector since the Cold War
Freeport-McMoRan cut full-year 2026 copper guidance by 300 million pounds on Grasberg execution delays, landing in a market already facing China’s sulfuric acid export ban and Hormuz chokepoint risk, compounding a concentrate squeeze that ICSG’s surplus projections may not adequately capture
Canaccord Genuity projects a structural lithium deficit from 2026 through 2035, as chronic underinvestment in new mines collides with accelerating demand. China’s lithium carbonate prices reportedly rose ~50% year-to-date in April, suggesting the market is beginning to price long-duration supply insufficiency.
Rare Earths
USA Rare Earth and Serra Verde
The headline event is USA Rare Earth’s ($USAR) definitive agreement to acquire 100% of Serra Verde Group for approximately $2.8 billion in cash ($300m) and stock. Serra Verde operates the Pela Ema mine in Goiás, Brazil, the only operating¹ ionic clay rare earth deposit in the Western world.
Quick recaps:
Ionic absorption clays are the predominant source of the HREEs
$USAR has recently (November 2025) acquired Less Common Metals (LCM), one of the few REE metallization companies in the Western
The transaction structure is as significant as the headline number:
The reported deal includes a 15-year offtake agreement covering 100% of production of the four magnetic REEs (Nd, Pr, Dy, and Tb), with contractual price floors (that’s the most important part of it, we’ll deep dive below).
Currently, Serra Verde’s DFC financing stands at $565 million, and the Department of Commerce has already signaled $1.6 billion in additional support via a letter of intent in January.
Serra Verde projects $550–650 million in annualized EBITDA by end-2027 at Phase 1 nameplate capacity of ~6,400 metric tons of total rare earth oxide per year, according to company guidance. The combined company targets $1.8 billion in EBITDA by 2030.
The important point is not the deal size; it is the pricing architecture.
A U.S.-backed platform now holds government-backed offtake with contractual floor prices for the exact elements where China exercises its most potent supply leverage.
Make no mistake, this is not a pure mine acquisition, it is an ‘industrial policy instrument’ dressed as an M&A transaction.
As we all remember, the NdPr price floor set in July 2025 for MP Materials (link) created a center of gravity that soon after adjusted the entire market.
And thanks to the $USAR-Serra Verde and the U.S. Government Special Purpose Vehicle (SPV) deal, we now have, for the first time, Dy and Tb price floors as a reference (see column ‘SPV Floor Prices’):
Why this matter?
Simple: the long going discussion of ‘which market’ to follow outside of China, now has a direct answer (for the good and the bad).
And likely to what happened to NdPr, the Dy and Tb price floors will exercise a force of gravity.
Note: if this is the first time you are actually seeing the floor prices for Dy and Tb, it means our work deserves to be shared:
Meanwhile, Brazil’s positioning as a rare earth jurisdiction is sharpening.The government signaled it sees no need for a state-owned critical minerals company (removing this elephant in the room), a posture that reinforces the field for private-sector platforms like $USAR but also exposes regulatory and political friction that could slow pipeline development for successor projects.
The question hanging over this entire sector: if $USAR consolidates more than 50% of non-China HREE supply by 2027, what is the competitive positioning of Lynas, MP Materials, and earlier-stage developers concentrated in light rare earths?
¹What we know about Serra Verde operating performance:
It’s reported that the exports of ‘Compounds, whether inorganic or organic, of rare earth metals, yttrium, or scandium, or mixtures of these metals’ from Minaçu, Goiás, Brazil, (Pela Ema municipality) reached a maximum of ~420t in January 2025, and averaged at ~86t/month (excluding null periods) for the past 24 months (visual below)
Keep in mind that the Compound (here assuming the Mixed Rare Earth Carbonate) has a moisture/humidity content that typically varies from 40-60% (industry operating standards)
The Compound export, adjusted (removing) the moisture/humidity content, compares to the desired nameplate capacity of ~6,400tpa TREO in Phase 1 (~530t/month), or to the 5,000tpa (~415t/month) TREO nameplate capacity of the inaugurated plant in 2024 (link)
Note: As a private company, we have limited access to Serra Verde’s operating KPIs. The currently available data from Brazil’s Ministry of Development, Industry, Trade and Services discloses information by municipality, not by company. And from our research, Pela Ema is the only mine in that municipality in operation
U.S. and EU Memorandum of Understanding (MOU)
On April 24, the U.S. Secretary of State Marco Rubio and EU Trade Commissioner Maros Sefcovic signed the U.S.–EU MOU on critical minerals at the State Department.
The United States Trade Representative (USTR) Jamieson Greer separately announced the accompanying Action Plan for Critical Minerals Supply Chain Resilience.
The combined framework includes explicit exploration of border-adjusted price floors, coordinated subsidies, processing standards, stockpiling cooperation, and investment screening.
This follows the February 2026 Critical Minerals Ministerial in Washington (link), where the U.S. Vice President Vance unveiled plans for a preferential trade bloc with coordinated price floors. The MOU converts that ‘political signal’ into an operational mechanism (with actual action plans). Maros Sefcovic expressed hope that pilot projects for the price floor mechanism could begin before year-end.
The Action Plan’s language is unusually direct. It identifies pervasive non-market policies and practices as the root cause of Western supply chain vulnerability.The longer-range objective is framed as a binding plurilateral agreement on trade in critical minerals, not a study group, but a negotiating mandate.
What the market should internalize is this: the U.S. and EU are now formally aligned on the assumption that critical minerals pricing should be managed within an allied trade zone, not left to spot-market logic (or unofficial market).
If (or when) this framework materializes, it creates a dual official pricing regime, one inside the Western bloc, another shaped by Chinese supply dominance.
Any analysis of Western mining and processing asset economics should account for this possibility.
The G7 and FORGE are identified as the multilateral venues for extending the framework. Japan, which participated in the February Ministerial, appears to be the natural next candidate.The direction appears increasingly set, leaving execution pace as the primary uncertainty.
Uranium
Three developments this week collectively mark the most significant moment for the U.S. nuclear fuel cycle in decades.
TerraPower breaks ground on Natrium
On April 23, TerraPower officially began construction on Kemmerer Unit 1 in southwest Wyoming, the first utility-scale advanced nuclear power plant to break ground in the United States.The 345 MWe sodium-cooled fast reactor, developed with GE Vernova Hitachi Nuclear Energy, features an integrated molten salt energy storage system capable of boosting output to 500 MWe during peak demand. Bechtel is the EPC contractor.
The Nuclear Regulatory Commission (NRC) approved the construction permit in March 2026, completing its review in 18 months versus the 27 months originally anticipated. Construction will employ roughly 1,600 workers.The plant targets operational status around end-2030, with a 42-month construction timeline.TerraPower has already signed an agreement with Meta for a potential deployment of up to eight Natrium plants by 2035.
This is a commercial template. If Natrium delivers on cost and schedule, it becomes the blueprint for fleet deployment.
For the uranium supply chain, the key implication is the HALEU demand signal; advanced reactors require high-assay low-enriched uranium that the U.S. does not produce at a commercial scale domestically.
DOE launches “Nuclear Dominance — 3 by 33”
The Department of Energy’s (DOE) Office of Nuclear Energy unveiled what it describes as the most comprehensive federal initiative for nuclear fuel supply chains since the original Cold War buildout.
Through the Defense Production Act Nuclear Fuel Cycle Consortium, more than 90 companies across the nuclear industrial base will work toward three goals by 2033:
Secure domestic fuel supply chain
Accelerated advanced reactor deployment with a closed fuel cycle
Workforce and financial infrastructure to support nuclear buildout
The initiative spans every link in the chain: milling, conversion, enrichment, deconversion, fabrication, recycling, and reprocessing. It will operate through 60-day sprints. The Department of Justice’s Antitrust Division approved the consortium’s voluntary agreements, granting limited antitrust defense for participants.
When the federal government invokes the Defense Production Act, names the initiative “Nuclear Dominance,” sets a seven-year deadline, and mobilizes more than 90 companies across the full fuel cycle, it is telling you something about urgency that no market consensus forecast currently reflects.
The question here is not whether domestic enrichment and conversion capacity will expand. It is whether it can expand fast enough to match the reactor deployment pipeline that Natrium, NuScale, X-energy, and others are building.
Orano’s Project Ike advances
Orano USA signed a MOU with North America’s Building Trades Unions for the construction of its $5 billion centrifuge enrichment plant in Oak Ridge, Tennessee. The workforce agreement formalizes plans for over 1,000 construction workers.
Brief timeline:
The DOE committed $900 million in January
Orano submitted its complete license application to the NRC in March 2026
Operations are projected for the early 2030s
Together with the DPA Consortium, this creates convergent timelines for domestic enrichment capacity expansion. Important to remember that the Russian uranium import ban takes full effect in 2028.
By the early 2030s, the U.S. aims to have both Orano’s centrifuge capacity and whatever emerges from the consortium’s accelerated roadmap. Whether this produces surplus or merely meets projected demand depends entirely on how many advanced reactors reach final investment decisions in the next three to four years.
The U.S.–Iran negotiations over approximately 1,000 pounds of near-weapons-grade highly enriched uranium added a geopolitical undercurrent to the week.Resolution of the Iran situation has downstream implications for the Strait of Hormuz and, by extension, for the sulfur and sulfuric acid supply chains that connect to copper production, a cross-sector risk that uranium and copper markets are pricing separately but should probably be reading together.
Copper
Freeport-McMoRan ($FCX) delivered Q1 2026 results that beat Wall Street expectations: $0.57 adjusted EPS versus $0.47 expected, $6.23 billion in revenue versus $5.96 billion consensus.
None of that mattered. The company cut full-year 2026 copper sales guidance to approximately 3.1 billion pounds from 3.4 billion, and gold sales to 650,000 ounces from 800,000, driven by a slower-than-expected ramp-up at the Grasberg Block Cave underground mine in Indonesia.
The problem is wet-ore handling. Following the September 2025 mud rush incident, the phased restart began in late March 2026, but the trajectory to full production has slowed materially.Management now projects approximately 65% of nameplate capacity in the second half of 2026, down from a prior estimate of 85%. Full recovery is not expected until late 2027.
$FCX shares fell more than 10% intraday, according to market data, and Morgan Stanley downgraded to Equal Weight the following day. Scotiabank lowered its price target to $67.
This matters beyond Freeport. Grasberg is the largest copper-gold mine in the world. A 300 million pound reduction from a single tier-1 asset lands in a market where concentrate availability is already severely constrained, with treatment and refining charges in negative territory.
That same week, the International Copper Study Group (ICSG) released its updated outlook, reversing its October 2025 projection of a 150,000-ton deficit for refined copper in 2026.The new forecast: a surplus of 96,000 tons, with a further surplus of 377,000 tons in 2027. Demand growth was revised down to 1.6% from 2.1%.
Goldman Sachs, by contrast, maintained its $12,650/t price target for 2026 while also projecting a surplus of 490,000 tons.The bank cites three compounding supply risks: potential closure of the Strait of Hormuz, China’s ban on sulfuric acid exports effective May, and the Grasberg delay.
Traxys projects $15,000/t within 24–36 months.
For reference, NYMEX copper futures closed at approximately $6.11/lb ($13,480/t) on April 25, near all-time highs.
The disconnect between ICSG’s surplus call and copper trading near records deserves attention.
The simplest (and most probable) explanation is that the market is pricing risk, not balance.
The acid export ban alone could constrain roughly 20% of global copper supply via Chile’s SX-EW operations. Layer in Hormuz risk to sulfur supply and the Grasberg shortfall, and you have a market where the paper balance says surplus but the physical reality says anything but.
Additionally, Peru announced a push to simplify mining approvals, a positive signal for the world’s second-largest copper producer, where projects like Tía María and Michiquillay have stalled for years.
The U.S. and Peru also signed expanded cooperation agreements on critical minerals, recycling, and policing of mining crime. Neither development changes the short-term supply picture, but both reinforce the trend of resource-rich nations creating frameworks to attract Western investment.
Lithium
Canaccord Genuity projected a material deficit in the lithium market beginning in 2026 and extending through 2035. Analysts cite chronic underinvestment in new mines as the structural driver: even if prices recover in 2027–28 and trigger a supply response, demand growth is expected to outpace it consistently.
Lithium carbonate prices in China reportedly reached CNY 173,000/t in April, up approximately 50% year-to-date, according to market participants.
That framing matters: it shifts the narrative from cyclical recovery to long-duration supply insufficiency. The lithium bear case of 2023–24, built on oversupply from Australian and Chilean expansions, appears to be reversing as those additions prove insufficient against accelerating EV adoption and grid storage deployment.
At the same time, Bloomberg reported significant progress in sodium-ion battery technology. CATL led successful extreme-cold testing in Inner Mongolia, and Chinese manufacturers like Changan Auto are already integrating sodium-ion batteries into production vehicles.This represents a credible technology alternative for entry-level EVs and grid storage, but not for high-performance applications where lithium’s energy density remains unmatched.
The sodium-ion story is real, and it will eventually carve out meaningful share in low-cost segments.
But it does not change the lithium deficit math for the applications that drive the bulk of value: premium EVs, long-duration storage, and defense systems. The structural deficit thesis holds. Sodium-ion is a demand ceiling constraint, not a demand substitute.
That is why the Canaccord Genuity call matters beyond the headline: a decade-long structural deficit, if confirmed by market evolution, changes the cost-of-capital calculus for lithium projects in the same way that long-duration nuclear contracts changed it for uranium miners.
Things You’re Probably Missing (But Shouldn’t)
The sulfuric acid chokepoint is about to become the copper story. China’s ban on sulfuric acid exports takes effect in May. Chile’s SX-EW operations, which account for roughly 20% of global copper supply, depend on acid availability. Combined with Hormuz risk to sulfur shipments, the acid squeeze could become the binding constraint on copper supply that no ICSG balance model captures. Chilean cathode output in Q3 will be the key data point to monitor.
Orano’s workforce agreement is a leading indicator for enrichment timeline credibility. It is easy to announce a $5 billion enrichment plant. Signing a formal MOU with the building trades unions on a 1,000-worker construction plan, with a license application already at the NRC, suggests this project has execution momentum, not just policy aspiration. The early 2030s timeline appears increasingly realistic.
Questions we should all be asking
If border-adjusted price floors for critical minerals become operational between the U.S. and EU (and Japan, and allies join), what does this mean for the cost of capital for mining projects inside the bloc versus outside it? And how does it reshape the incentive structure for processing investments in countries like India, Indonesia, and Saudi Arabia?
The U.S. nuclear fuel cycle is being rebuilt under Manhattan Project-scale urgency, but the HALEU supply chain remains almost entirely notional. If advanced reactor deployments outrun fuel supply by 2030, does the bottleneck force the U.S. back toward Russian enrichment dependence through intermediary arrangements?
With $USAR now controlling the dominant ex-China HREE platform under government-backed price floors, are Lynas, MP Materials, and earlier-stage developers competing for the same market? Or has the Western rare earth sector effectively bifurcated into HREE (government-backed) and LREE (market-priced)?
If China imposes additional (or maintains) export restrictions on heavy rare earths in the November 2026 review, does the West have any credible substitution capacity for terbium and dysprosium outside of Serra Verde in the short term?
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