While Brazil and the United States have yet to conclude a government-to-government agreement on critical minerals, Washington is already positioning itself to secure future rare earth supplies from Brazil through direct financing of advanced mining projects.
Two companies operating rare earth projects in Brazil, Serra Verde and Aclara Resources, have recently secured funding from the US International Development Finance Corporation (DFC). The agreements could give the United States early access to future production, even in the absence of a formal bilateral framework.
Rare earth elements, a group of 17 metals that are difficult to extract and refine, are essential for high-performance magnets used in electric vehicles, wind turbines and defence technologies. The sector has become a strategic priority for the US as it seeks to reduce dependence on China, which currently accounts for around 60 percent of global rare earth mining and nearly 90 percent of refining capacity.
The most significant deal to date involves Serra Verde, currently the only rare earth producer operating in Brazil and one of the few outside Asia. In November, the company announced it would receive a USD 465 million loan from the DFC to support the expansion of its mine in northern Goiás.
Serra Verde is owned by two US investment funds and one UK-based fund. While the full terms of the agreement have not been disclosed, market participants say such financing typically involves commitments to supply part of future production to the US market.
In an interview with Reuters earlier this month, Serra Verde’s chief executive Thras Moraitis said the company had recently restructured contracts with Chinese clients to allow part of its output to be directed to Western customers.
“Within a few years, we will have some options to separate heavy rare earths outside China,” Moraitis said.
The company aims to produce 5,000 tonnes of rare earth oxide contained in concentrate by early 2027, rising to 10,000 tonnes by 2030. The DFC loan is intended to fund that scale-up. Serra Verde’s output currently consists of rare earth concentrate, a pre-refining product with relatively low added value compared to separated oxides.
According to Samantha Carl-Yoder, former US vice-consul in São Paulo and now policy director at lobbying firm Brownstein, DFC financing is closely tied to supply security.
“For a critical minerals company to receive DFC financing, it must ensure that a portion of its production is made available to the United States. That is typically part of the final agreement,” she said.
Aclara Resources, which is developing a separate rare earth project in northern Goiás, secured a USD 5 million financing package from the DFC in September. The funds, which may be converted into equity at a later stage, will be used to complete the project’s feasibility studies.
In October, Aclara announced plans to build a rare earth separation facility in the United States by 2028, with an estimated investment of USD 277 million. The proposed plant would process concentrate produced in Brazil and, according to the company, could supply more than 75 percent of US demand for heavy rare earths used in electric vehicles.
Aclara said in a statement that its agreement with the DFC does not guarantee future funding rounds nor impose obligations to sell production to US buyers.
“Any processing steps outside Brazil will follow commercial, technical, regulatory and tax criteria and do not change Brazil’s central role in the project,” the company said.
The move toward offshore processing contrasts with the Brazilian government’s stated objective of keeping more value-added stages of critical minerals production within the country. President Luiz Inácio Lula da Silva has previously indicated that domestic processing would be a key condition in any future agreement with the United States.
Brazilian officials travelled to Washington earlier this month to discuss critical minerals cooperation, though no timeline has been set for a bilateral deal. The Ministry of Mines and Energy said it “maintains ongoing dialogue with various strategic partners on critical and strategic minerals”.
A potential agreement could mirror the deal signed between the US and Australia in October, under which Washington committed USD 8.5 billion to support critical minerals processing in Australia.
Still, some analysts argue that formal intergovernmental agreements are not essential. Erasto Almeida, an executive at SAFE, an organisation that works with the US government on critical minerals strategy, said Brazil’s open mining regime already facilitates foreign investment.
“Brazil has a mining sector that is open to foreign capital, so in theory you do not need a government-to-government agreement to advance these projects. That said, strong bilateral political relations clearly help,” Almeida said.
Sources familiar with US policy discussions say Washington remains interested in formal arrangements with Brazil, even as it backs individual projects. One objective would be to secure preferential access for US companies to future Brazilian critical minerals output or to new areas offered for exploration.
As global competition for rare earths intensifies, Brazil’s vast reserves and US-backed financing are increasingly intersecting, reshaping both countries’ strategies in the emerging critical minerals landscape.
