Brazil’s only rare earth producer offers US stake option for loan deal

Brazil’s only producing rare earth miner has given the US an option to acquire a stake in the company as part of a financing deal.

Serra Verde Group secured a $565 million loan with the US International Development Finance Corporation — an amount 22% more than initially approved by the agency’s board last year. The loan is to help cover upgrades to the company’s Pela Ema operations in Brazil’s Goiás state. The final terms, disclosed by the company, opens the door to US involvement in the closely held firm.

“It is an option for the US government to take a minority stake in the company, with no role in management,” Serra Verde chief operating officer Ricardo Grossi said in an interview.

The Trump administration has been accelerating its backing of companies in the rare earth supply chain to counter China’s dominance in the sector, with the government offering loans and taking equity stakes in companies including MP Materials Corp. and Vulcan Elements. Meteoric Resources NL and Aclara Resources Inc., two developers with Brazilian rare earth projects, have also secured US financing, though at much lower amounts.

Talks between Serra Verde and the DFC have been ongoing for about 18 months, according to Grossi. The company is backed by Denham Capital, Energy and Minerals Group and the UK’s Vision Blue Resources Ltd.

The financing announcement comes after the Trump administration unveiled plans for a strategic critical minerals stockpile to insulate manufacturers from supply shocks as the US works to cut its reliance on Chinese rare earths and other metals. The venture, dubbed Project Vault, sets to marry $1.67 billion in private capital with a $10 billion loan from the US Export-Import Bank to procure and store minerals for automakers, tech firms and other manufacturers.

“It makes complete sense” for Serra Verde to be part of Project Vault, Grossi said, though such participation is still under discussion. “We view the initiative positively, as it could be a way to bring forward revenue for early-stage projects and help buy time until rare earth separation plants outside Asia mature.”

Grossi wouldn’t say whether the DFC funding will be tied to future supply deals, known in the industry as offtake agreements. Serra Verde is renegotiating rare earth supply agreements previously signed with Chinese customers, he said, with contracts expected to conclude by year end — opening the door to contracts with Western companies.

Brazil has the largest rare earth reserves outside China and Serra Verde is the country’s only producer of those metals. Its Pela Ema deposit contains light and heavy rare earth elements — mainly neodymium, praseodymium, terbium and dysprosium – that are key to making magnets used in a wide range of applications.

Serra Verde began commercial output at its mine and processing plant in 2024. The company aims to ramp up annual output to 6,500 metric tons of total rare earth oxides by the end of next year. The company is considering doubling production capacity within the next four years.

(By Mariana Durao)