Energy Fuels just spent $1.9 billion on a German magnet maker most people have never heard of. The deal, announced Monday, is the largest rare earths acquisition by a Western miner in years—and it has almost nothing to do with digging holes in the ground.
The target is Vacuumschmelze, a century-old manufacturer with over 400 patents and magnet plants across three continents, Benzinga reported. Energy Fuels already owns uranium mines and a rare earths processing mill in Utah. Now it wants the downstream piece: the ability to turn separated oxides into the high-performance magnets that power EV motors, wind turbines, and defense systems. The transaction, expected to close in early 2027, would create what Metal Tech News called a Western platform stretching "mine to finished magnet"—a supply chain structure China spent three decades building and the West is now scrambling to replicate.
The timing is no accident. Britain announced a £50 million critical minerals package this week, and £20 million of it is earmarked for a national rare earth magnet hub, according to Mining.com. The UK also celebrated the opening of its first commercial rare earth magnet facility in 25 years, operated by HyProMag in Birmingham. These aren't mining investments. They're bets on processing, metallization, and manufacturing—the chokepoints where China controls roughly 90% of global capacity, per the International Energy Agency.
Can You Build a Magnet Industry From Scratch?
The Energy Fuels-VAC deal solves one problem and exposes another. VAC brings manufacturing expertise, customer relationships with aerospace and automotive firms, and a recently commissioned 2,000-tonne-per-year magnet plant in South Carolina that can scale to 12,000 tonnes, Benzinga noted. That's the easy part. The hard part is feedstock.
Energy Fuels processes monazite sand at its White Mesa Mill in Utah, producing separated rare earth oxides. But turning oxides into the metal alloys that magnets require is a different industrial capability—one that barely exists in North America today. The company is planning an "American Metals Plant" and has secured a conditional $725 million loan from the U.S. Office of Strategic Capital to fund it, according to Investing.com. Yet as one industry analysis put it, "large-scale rare earth metallization is not a construction project. It is an industrial capability project."
China didn't dominate this market by accident. It invested in mines, refineries, and magnet factories simultaneously over decades, accepting low margins to drive out Western competitors. The result is a supply architecture so concentrated that a single export restriction can ripple through automotive assembly lines and wind turbine plants on three continents. Bloomberg Economics estimates that $1.4 trillion of the U.S. economy is linked to industries that use rare earths.
Rio Tinto is taking a different approach. The world's second-largest miner expects its lithium business to grow faster than copper or iron ore as it works to triple production by 2028, an executive told Reuters on Monday. The company jumped into lithium last year with its $6.7 billion acquisition of Arcadium, gaining mines, processing facilities, and a customer base that includes Tesla. Rio plans to produce at least 61,000 metric tonnes of lithium this year and have capacity for 200,000 tonnes by 2028—but only if the market demands it. "It's a market that is trying to find itself, in a way," said Jérôme Pécresse, head of Rio's aluminum and lithium unit.
