Energy Fuels buys German magnet group Vacuumschmelze for $1.9bn

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Energy Fuels acquires Vacuumschmelze

Highlights

Energy Fuels acquires Vacuumschmelze for $1.9 billion, paying $718 million in cash and issuing 66 million shares for Ara Partners' 19.9% stake.
VAC's new Sumter, South Carolina facility is expected to generate $130 million to $140 million in annual adjusted earnings when fully scaled, up from $29 million in 2025 excluding this plant.
Energy Fuels secures $725 million in 20-year debt financing from the U.S. Office of Strategic Capital to expand Utah processing and build U.S. rare earth facilities.

Deal structure and supply chain expansion

As reported by Financial Times, New York-listed Energy Fuels is acquiring German magnet maker Vacuumschmelze from Ara Partners for $718 million in cash and nearly 66 million newly issued shares, giving the private equity firm a 19.9% stake in the miner.

The transaction adds one of the West's few operational magnet producers to Energy Fuels' portfolio as companies race to create "mine-to-magnet" supply chains less dependent on China. Rare earths are used in products ranging from cars to fighter jets, and Beijing continues to dominate the sector after increasingly using its market position as leverage in recent years.

Ross Bhappu, president and chief executive of Energy Fuels, calls the deal a transformational moment for the company and the global rare earth supply chain. Erik Eschen, president and chief executive of VAC, says the combined group is positioned to meet rising demand from automotive, aerospace, defence, hyperscale data centres, robotics and semiconductors.

Manufacturing scale and strategic industry impact

VAC operates in Europe, the U.S. and Asia and serves more than 1,000 customers. The company has been producing magnets for more than 100 years, holds more than 400 patents and has a Pentagon contract to supply magnet materials to the U.S. national defence stockpile, with production starting in 2026.

Its business excluding a new Sumter, South Carolina facility generated $29 million in adjusted earnings in 2025. Once fully scaled, the Sumter plant is expected to generate between $130 million and $140 million in annual adjusted earnings, according to the companies.

Energy Fuels last week also secured $725 million in conditional debt financing over 20 years from the U.S. Office of Strategic Capital to support expansion of its Utah processing facility and construction of a rare earth metals and alloys facility in the U.S. The latest deal underscores both the commercial opportunity and the technical difficulty of expanding domestic magnet production, at a time when the sector is also facing disputes over proprietary technology, including MP Materials' allegation in May that USA Rare Earth stole permanent magnet technology, a charge its rival denies.

Our earlier coverage of President Donald Trump’s Pennsylvania campaign stop highlighted his push to sell a jobs-and-reindustrialization agenda from a manufacturing backdrop in the Lehigh Valley. We noted that the message comes as higher consumer costs and Middle East tensions complicate the economic narrative, with gasoline prices and energy security remaining a politically sensitive pressure point.

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