Gina Rinehart-backed Brazilian rare earth miner raises $78 million

Brazilian Rare Earths Ltd., backed by richest Australian Gina Rinehart, raised A$120 million ($78 million) selling new shares as it seeks to develop a project for the key materials used in electric vehicles and defense equipment. The stock surged as much as 12% after reopening Tuesday.

Before entering a trading halt on Monday, Brazilian Rare Earths had a market value of about A$1.24 billion, with Rinehart’s closely held Hancock Prospecting Ltd. holding a 5% stake. The billionaire, who accumulated her wealth through developing massive iron ore assets in Western Australia, also holds stakes in US government-backed MP Materials Corp. and Australia’s Lynas Rare Earths Ltd., along with several smaller developers.

The shares were trading 9% higher at A$5.45 as at 10:09 a.m. in Sydney.

Brazilian Rare Earths is seeking to develop the Rocha da Rocha project in Bahia state in the South American nation’s northeast.

The company received “firm commitments” for a placement of 25.6 million shares at A$4.68 per share, it said in a statement Tuesday. That represented a 6.4% discount to its previous closing price.

The “new funds will fast-track development of ultra-high-grade rare earth projects in Brazil and compress timelines for the planned integrated rare earths separation refinery at Camaçari, Bahia,” it said in the statement.

(By Jason Scott)