Energy Fuels Inc (NYSE: UUUU) (TSE: EFR) said it will acquire Australian Strategic Materials Limited (ASX: ASM) in a deal that reshapes rare earth supply chains outside China.
The transaction values ASM at about USD$299 million and uses a court-approved scheme of arrangement under Australian law. Energy Fuels said the acquisition supports its plan to build a fully integrated rare earth producer spanning mining, processing, metals, and alloys.
The companies expect to complete the deal following shareholder and regulatory approvals in Australia and other jurisdictions.
Under the agreement, Energy Fuels will acquire 100 per cent of ASM’s issued share capital. ASM shareholders will receive 0.053 Energy Fuels shares, or CHESS Depository Interests, for each ASM share. In addition, eligible ASM shareholders will receive a special cash dividend of up to A$0.13 per share. Together, the consideration implies a total value of about A$1.60 per ASM share. Consequently, the deal implies an equity value for ASM of roughly A$447 million, assuming an AUD/USD exchange rate of 0.668.
Energy Fuels said the acquisition creates what it believes will be the largest fully integrated rare earth producer outside China. The combined business would control production from mine feedstock through metals and finished alloys. Additionally, the company said the structure allows sales at multiple stages of the value chain.
This flexibility, it argued, should support higher margins and broader customer relationships. However, execution will depend on scaling processing capacity and aligning operations across three continents.
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Non-Chinese supply chains lack downstream refining capacity
The transaction brings together Energy Fuels’ White Mesa Mill in Utah with ASM’s downstream processing assets. White Mesa currently produces separated rare earth oxides from monazite concentrates. It remains the only U.S. facility capable of separating both light and heavy rare earth elements.
Meanwhile, ASM operates the Korean Metals Plant, one of few ex-China facilities producing rare earth metals and alloys. The integration connects oxide production directly to metal and alloy manufacturing.
ASM’s Korean Metals Plant produces neodymium-praseodymium, dysprosium, and terbium metals. It also manufactures neodymium-iron-boron and dysprosium-iron alloys used in permanent magnets. These materials support electric vehicles, wind turbines, robotics, and defense systems. Additionally, global demand for these products continues to grow as electrification accelerates. Energy Fuels said the combined platform addresses a major bottleneck in rare earth supply chains.
Most non-Chinese supply chains lack downstream refining and conversion capacity. Consequently, many producers still rely on Chinese processors for metals and alloys. Energy Fuels said the acquisition directly targets that vulnerability. Furthermore, it positions the company as a strategic supplier to U.S. and allied industries. The company said customers increasingly seek traceable, non-Chinese rare earth sources.
Energy Fuels also plans to leverage ASM’s technology and intellectual property in the United States.
The deal includes ASM’s planned American Metals Plant. This facility would mirror the Korean plant’s metallization and alloying capabilities.
Additionally, Energy Fuels said the U.S. plant would produce about 2,000 tonnes per annum of alloy. The company described the project as de-risked due to prior operating experience in Korea. The acquisition also expands Energy Fuels’ upstream development pipeline.
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White Mesa to process rare earth
ASM owns the Dubbo rare earth project in New South Wales. The Dubbo project represents a large, long-life rare earth deposit with polymetallic output. In addition, Energy Fuels already holds interests in the Donald project in Victoria. It also controls projects in Madagascar and Brazil intended to supply White Mesa.
Energy Fuels plans to expand White Mesa to process significant rare earth volumes. The company targets annual output of about 6,000 tonnes of neodymium-praseodymium oxide. It also aims to produce 240 tonnes of dysprosium oxide and 66 tonnes of terbium oxide annually. Subsequently, those oxides would feed downstream metal and alloy facilities. This integrated flow underpins the company’s long-term rare earth strategy.
Chief executive Mark Chalmers said the acquisition accelerates Energy Fuels’ rare earth ambitions. He described the deal as a step toward building a complete ex-China supply chain. He also said the combination benefits customers seeking secure critical materials. Additionally, he framed the transaction as value-accretive for shareholders. The company expects margin expansion through vertical integration.
Chalmers said ASM’s Korean facility provides immediate downstream capacity. He added that the site already operates at commercial scale. Furthermore, he said ASM’s expertise reduces execution risk for U.S. expansion. The company plans to adapt ASM’s processes for domestic production. This approach, he said, shortens timelines compared with greenfield development.
Energy Fuels emphasized its existing experience in Australia. In October 2024, the company completed the acquisition of Base Resources Limited. Earlier, in June 2024, it formed a joint venture with Astron Corporation. Consequently, management said Australia remains a core growth market. The company committed to continued investment in Australian projects and employment.
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Rare earth markets face supply concentration risks
Under the scheme, ASM shareholders will collectively own about 5.8 per cent of Energy Fuels post-closing. ASM’s board unanimously recommended shareholders vote in favor of the transaction.
That recommendation stands in the absence of a superior proposal. It also depends on an independent expert concluding the deal benefits ASM shareholders. All ASM directors intend to vote their shares in favor under those conditions.
ASM’s largest shareholder, Ian Gandel, supports the transaction. He controls about 13.6 per cent of ASM’s issued shares through nominees. Additionally, the deal includes a separate option scheme for ASM option holders. Eligible option holders will receive A$0.50 in cash per option. However, the option scheme remains conditional on completion of the share acquisition.
Energy Fuels said the transaction should be accretive to net asset value per share. It also cited significant upside from improved margin capture. Meanwhile, rare earth markets continue to face supply concentration risks. China still dominates refining, metallization, and magnet production globally. Governments increasingly view diversification as a strategic priority.
The combined company aims to serve automotive, energy, and defense customers directly. Additionally, it expects to offer products at different processing stages. This includes oxides, metals, and finished alloys. Consequently, customers could reduce exposure to single-country supply risks.
Energy Fuels said that flexibility strengthens long-term commercial relationships. The transaction remains subject to customary conditions.
These include court approval in Australia and regulatory reviews. Shareholders from both companies must also approve the scheme. Energy Fuels said it expects the process to progress through 2026.
Meanwhile, integration planning has already begun.
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