By Eric Onstad

LONDON, April 20 (Reuters) - Brazilian rare earth miner Serra Verde, which agreed on Monday to be acquired by USA Rare Earth USAR.O, will receive price floors for four rare earths in a 15-year supply deal with the U.S. government and private investors, according to a presentation about the deal.

Critics have said price floors, which aim to level the playing field with dominant rare earth producer China, have the potential to distort the market.

China accounts for about 90% of global processed rare earth output, and U.S., Europe and other Western nations are racing to build their own domestic sectors for rare earths, vital for the energy transition, electronics and defence applications.

Last year, the U.S. government first offered a price floor to MP Materials MP.N, which controls the only operating rare earth mine in North America, as part of a multi-billion dollar support and funding deal.

Serra Verde said on Monday it had agreed a 15-year agreement to supply all of its first phase output to a special purpose vehicle capitalised by the U.S. government and private sources.

The supply deal includes price floors for the four major rare earths needed to make permanent magnets - neodymium, praseodymium, dysprosium and terbium - used in electric vehicles, wind turbines, drones and fighter jets.

The floor price for neodymium and praseodymium (NdPr), which are often supplied as a joint product, is the same as for MP Materials - $110 per kilogram, the presentation said.

The Chinese price of NdPr oxide SMM-REO-DIO has nearly doubled since the U.S. government offered a price floor to MP Materials and was last at 795,000 yuan per metric ton, or $117 per kg, up from $63 on July 9, 2025, when the MP Materials deal was announced.

Serra Verde's mine is rich in heavy rare earths, unlike many other Western deposits, and the deal included floor prices for dysprosium and terbium at $575 and $2,050 per kg, respectively.

The company and the U.S. special vehicle will share 70% of the upside if the non-China market price rises above the floor prices, it added.