USA Rare Earth said on Monday (24) that it has secured the funding needed to complete its takeover of Serra Verde, the only rare earth miner in operation in Brazil. The move came after the US government raised its contribution to a vehicle created to buy the miner's output from US$ 500 million to US$ 750 million, an extra US$ 250 million (about R$ 1.2 billion) that removed one of the conditions for closing the deal. Shareholders vote on the transaction on Friday (28), and the company expects to close shortly after, if the remaining conditions are met.
The financial structure assembled for the deal totals US$ 1.55 billion (about R$ 7.7 billion). Besides the US$ 750 million from the US Department of War (the Pentagon, formerly the Department of Defense), the package includes a bank credit line of up to US$ 500 million and a US government commitment to buy at least US$ 300 million in rare earths over five years. The funds will sit in a special purpose vehicle identified in regulatory filings as US SIIE, capitalized by the US government and private investors, which will purchase the miner's production. According to CNN Brasil, the amount is not a direct investment in the Brazilian company.
USA Rare Earth announced on April 20 the agreement to acquire 100% of Serra Verde for about US$ 2.8 billion, with US$ 300 million in cash and the issuance of roughly 126.8 million shares of the American company. Serra Verde also signed a 15-year contract to sell the vehicle its entire first-phase output of four magnetic rare earths: neodymium, praseodymium, dysprosium and terbium. According to USA Rare Earth, the contract includes mandatory purchase clauses and the industry's first price floors for the heavy rare earths dysprosium and terbium.
The Pela Ema mine
Serra Verde operates the Pela Ema mine in Minaçu, in northern Goiás state, where it extracts rare earths from an ionic clay deposit. Commercial production began in 2024, and more than US$ 1 billion has already been invested in the project, according to G1. USA Rare Earth says that once the deal closes, Pela Ema will be the only ionic clay rare earth mine in commercial production outside Asia capable of supplying the four main elements used to make high-performance permanent magnets.
The increased funding from the Trump administration reflects Washington's interest in securing a source of rare earths outside China, which dominates the processing and refining stages of these minerals. The four elements produced by Serra Verde go into magnets used in fighter jets, submarines, missiles and drones, as well as electric vehicles and electronics. In a statement, Mike Cadenazzi, the US assistant secretary of War for Industrial Base Policy, said the investment aims to guarantee the country and its allies access to critical materials.
"This effort ensures our defense industry has stable and enduring access to the critical materials needed to build next-generation weapon systems and maintain our technological edge," Cadenazzi said.
Brazil holds the world's second-largest rare earth reserves, with about 25% of the global total, according to the Ministry of Mines and Energy. With the acquisition, USA Rare Earth plans to integrate the Goiás output into its processing and magnet manufacturing operations in the United States and the United Kingdom, covering the chain from mining to magnet production.