US-listed Energy Fuels is adding another building block in its rare earth supply chain vertical integrations plans with the proposed acquisition of Australian Strategic Materials Limited (ASM), which brings direct metallisation and alloying capabilities to the company.

The transaction, announced on Wednesday, will create what the companies describe as a near-term, Western-focused “mine to metal and alloy” rare earths champion outside China.

The transaction brings together Energy Fuels’ rare earth oxide production at its White Mesa mill in Utah – the only operating facility in North America capable of separating monazite into both light and heavy rare earth oxides – with ASM’s downstream metals and alloy capability at its Korean Metals Plant (KMP) and its planned American Metals Plant (AMP).

ASM's KMP is one of the few facilities outside of China currently producing rare earth element (REE) metals and alloys, including neodymium-praseodymium, dysprosium, and terbium metals and neodymium-iron-boron and dysprosium-iron alloys.

By integrating low-cost and scalable REE separation with downstream REE metal and alloy conversion, Energy Fuels expects to enhance vertical integration, margin capture, and market share across the REE value chain, providing the company with the flexibility to sell REE products to end-users at multiple stages.

The transaction addresses a lack of downstream REE refining and conversion capability, which is one the most persistent vulnerabilities in ex-China REE supply chains.

Further, the planned AMP provides Energy Fuels with a de-risked plan to construct an REE metals and alloys facility in the US capable of producing 2 000 t/y of alloy by leveraging the technology and intellectual property used at ASM's operating KMP to better serve the company's customers.

Energy Fuels CEO Mark Chalmers described the acquisition as a major step in building an integrated, ex-China rare earths supply chain spanning oxides, metals and alloys.

“Energy Fuels is executing our plan to create the largest fully integrated producer of REE materials outside of China, including REE oxides, metals and alloys, while supporting US and allied critical mineral supply chains,” Chalmers said. “The proposed acquisition of Australian Strategic Materials brings us much closer to that goal.”

Beyond existing operations, the deal adds ASM’s Dubbo rare earths project in New South Wales to Energy Fuels’ development pipeline, alongside projects in Victoria, Madagascar and Brazil that are intended to supply feedstock to an expanded White Mesa mill.

Energy Fuels has also committed to establishing a secondary listing on the ASX, allowing ASM shareholders to trade Energy Fuels shares via CDIs, and said the combined group would offer greater funding capacity and reduced execution risk through scale and diversification across uranium, rare earths and mineral sands.

Under a binding scheme implementation deed, Energy Fuels will acquire 100% of ASM via a court-approved scheme of arrangement, implying a total value of A$1.60 a share and an equity value of about A$447-million for ASM on a fully diluted basis.

The consideration comprises 0.053 Energy Fuels shares, or ASX-listed CHESS depositary interests, for each ASM share – implying a value of A$1.47 a share based on Energy Fuels’ recent trading – plus an unfranked special dividend of up to A$0.13 a share. The offer represents a premium of about 121% to ASM’s last closing price on January 20 and about 133% to its 30-day volume-weighted average price.

ASM’s board has unanimously recommended the scheme, in the absence of a superior proposal and subject to an independent expert concluding that the deal is in the best interests of shareholders. Directors controlling about 13.8% of ASM shares, including nonexecutive chair and largest shareholder Ian Gandel, have indicated they intend to vote in favour of the transaction on the same basis.

The deal also includes a concurrent option scheme under which holders of ASM’s listed options will receive A$0.50 cash a option.

ASM MD and CEO Rowena Smith said the proposed combination would accelerate the company’s strategy while delivering immediate value to shareholders.

“This proposed combination delivers a significant premium for ASM shareholders and ensures our shareholders retain the opportunity to participate in the substantial upside of a larger, better capitalised critical minerals business,” Smith said.

“We are pleased to recommend this transaction not only for the value it delivers but it accelerates the execution of our mine-to-metals strategy in a way that unlocks greater scale, de-risks delivery and positions us to capture the full potential of our rare earths opportunity.”

The scheme remains subject to shareholder and court approval, regulatory clearances including Foreign Investment Review Board approval, and other customary conditions. ASM expects to dispatch a scheme booklet in due course, with the scheme meeting planned for the second quarter of 2026 and implementation targeted before the end of June.