The United States is decisively stepping up efforts to diversify its strategic mineral supply chains, drastically reducing dependence on China.
As reported by the Financial Times, through the DFC – the US International Development Finance Corporation – Washington has concluded a $565 million deal with the Brazilian mining company Serra Verde.
In exchange for the financing, the United States obtained the right of first refusal and control over the rare earths produced by the Pela Ema mine, one of the very few sites worldwide outside China capable of extracting heavy rare earths.
The heavy rare earths produced at the Pela Ema mine are of extremely high strategic importance because they are used in the composition of permanent magnets employed in numerous critical sectors, including electric vehicles and high-efficiency motors, weapon systems and defense technologies, wind turbines, consumer electronics, and high-tech devices.
The agreement with Serra Verde
The DFC granted a $565 million loan initially committed at $465 million and subsequently increased in December.
In return, the United States obtained specific “offtake controls,” which are essentially clauses controlling the purchase and destination of the product.
These clauses ensure that the metals produced are primarily destined for the United States and allied countries, preventing them from entering the Chinese market or falling into hands considered unreliable.
Conor Coleman, head of investments at the DFC, told the Financial Times that such rights of influence over the sale of metals are directly linked to the financing conditions.
This is therefore a tool of financial diplomacy that ties American economic support to strategic control over extracted resources.
Brazil’s geopolitical positioning in the global rare earth race
The Brazilian mine represents one of the very few alternative sources to China, which holds an almost monopoly on the refining and global production of these rare earths. For this reason, the Pela Ema mine has attracted growing interest from governments and buyers worldwide.
Brazil holds the second largest rare earth reserves in the world, but actual production remains very limited.
This gap between enormous reserves and low production has turned the South American country into a central player in the global race for these coveted minerals.
Besides the United States, the European Union and India have also shown strong interest in Brazilian resources.
The Trump administration was particularly active: it presented formal cooperation proposals to Brasília and, according to the Brazilian Foreign Ministry, technical teams from both countries are addressing the issue in regular meetings.
Serra Verde is currently the only operational rare earth producer in Brazil. At least six other projects are under development, but the lack of adequate financing represents a significant obstacle slowing the expansion of national production capacity.
In anticipation of growing global demand, Serra Verde has modified some sales agreements previously primarily destined for China, making a larger share of production available to buyers worldwide.
This decision reflects the company’s willingness to diversify its customers and to align, at least in part, with the national security needs of the United States and its allies.
The parallel operation with Syrah Resources in Australia
The Financial Times reports a second significant intervention by the DFC to secure access to critical minerals.
The Corporation announced its intention to carry out a debt-for-equity swap with the Australian company Syrah Resources, one of the main producers of natural graphite outside China, through the Balama mine in Mozambique.
This operation would lead the DFC to hold about 20% of the company’s capital, allowing the United States to take a more active role in corporate governance.
Conor Coleman explicitly explained the motivation: “We did not want to risk these assets falling into the wrong hands.”
The agreement would also allow Americans to “take a much more active role in the company.”
The deal represents the evolution of a previous $150 million loan granted in 2024 and is still subject to various government approvals.
Syrah Resources has faced recent market difficulties due to an oversupply of graphite from Chinese producers, which caused prices to collapse.
In 2024, the company was forced to declare force majeure at its Mozambique operation due to civil unrest, although production was subsequently restarted.
Further US initiatives in the sector
The FT briefly mentions a third American intervention: the US Export-Import Bank plans to grant a $2.7 billion loan to Perpetua Resources for a gold and antimony mining project in the United States.
Antimony is an element used both in the flame retardant industry and in the defense sector. This financing is also still subject to final approvals.
