Energy Fuels, a U.S.-based uranium and rare earth minerals company, is acquiring German magnet manufacturer Vacuumschmelze (VAC) in a deal valued at $1.9 billion, as efforts to reduce Western dependence on China’s rare earth supply chains intensify. The transaction, announced in early June 2024, involves $718 million in cash and approximately 66 million newly issued shares of Energy Fuels, giving VAC’s current owner, U.S. private equity firm Aria Partners, a 19.9% stake in the mining company.
VAC, with operations spanning Europe, the United States, and Asia, is one of the few Western producers making rare earth magnets and serves over 1,000 customers. The German company’s magnetic materials are crucial for multiple high-tech sectors, including automotive, aerospace, defense, data centers, robotics, and semiconductors. Founded more than a century ago, VAC holds over 400 patents and maintains a contract with the U.S. Department of Defense to supply magnet materials for the national defense stockpile, with production expected to commence this year.
The deal marks a significant step in building an integrated “mine to magnet” supply chain outside of Chinese control, a primary objective for the U.S. and its allies amid concerns over Beijing’s dominance and use of rare earth materials as a strategic leverage point. Ross Bhappu, president and CEO of Energy Fuels, described the acquisition as a transformative moment for both the company and the global rare earth ecosystem. VAC CEO Erik Eschen highlighted the combined entities’ ability to meet surging demand across various critical industries.
Financially, VAC reported $29 million in adjusted earnings last year from existing operations, excluding a new facility in Sumter, South Carolina. Once fully operational, the Sumter site is projected to contribute between $130 million and $140 million in annual adjusted earnings. This facility forms part of Energy Fuels’ broader strategy to expand its domestic processing capabilities, supported by $725 million in conditional, long-term debt financing recently secured from the U.S. Office of Strategic Capital.
The agreement comes amid a competitive and rapidly evolving industry landscape, where companies investing in rare earth mining and processing are prepared to pay substantial premiums for operational assets. Industry tensions also surfaced recently, with MP Materials accusing competitor USA Rare Earth of technology theft related to permanent magnets—a claim denied by USA Rare Earth.
Energy Fuels’ acquisition of VAC underscores the increasing urgency among Western firms and governments to develop secure, non-Chinese rare earth supply chains to support critical technologies and national security priorities.