Brazil's Serra Verde Offers US Minority Stake in Expanded DFC Loan Deal

Brazilian rare earth producer Serra Verde Group has reportedly offered the United States an option to take a minority stake in the company as part of a newly expanded financing package, according to Bloomberg.

The move comes as Serra Verde finalized a US$565 million loan with the US International Development Finance Corporation (DFC), roughly 22 percent higher than the amount initially approved by the agency’s board last year. The expanded financing is aimed at supporting the company’s ongoing development and scaling of its rare earth operations.

Serra Verde is Brazil’s only producing rare earth miner and operates a long-life deposit rich in both heavy and light rare earth elements (REEs), including neodymium (Nd), praseodymium (Pr), terbium (Tb) and dysprosium (Dy). These elements are critical for permanent magnet production and have applications across defense, aerospace, nuclear, and other advanced technologies.

Founded to develop Brazil’s rare earth resources, Serra Verde has positioned itself as a potential strategic supplier for Western supply chains seeking alternatives to Chinese dominance in the sector.

The potential US minority stake would reflect Washington’s broader push to secure access to critical minerals and reduce dependence on foreign suppliers amid increasing global competition for strategic resources.

As part of the final terms, the DFC received an option to acquire a minority equity stake in Serra Verde, without any role in management.

“It is an option for the U.S. government to take a minority stake in the company, with no role in management,” CEO Ricardo Grossi said in an interview, adding that discussions with the DFC have been underway for roughly 18 months.

The financing comes just weeks after the Trump administration unveiled plans for Project Vault, a proposed US strategic stockpile of critical minerals aimed at insulating manufacturers from supply disruptions.

The initiative would combine private capital with a US$10 billion loan from the US Export-Import Bank to procure and store materials such as rare earths, lithium, and cobalt.

“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 said, but clarified that discussions are still preliminary.

Grossi also confirmed that Serra Verde is renegotiating offtake contracts previously signed with Chinese customers. Those agreements are expected to conclude by year end, potentially clearing the way for supply deals with Western manufacturers.

Brazil holds the largest rare earth reserves outside China, and Serra Verde is currently the country’s only producer.

The Pela Ema deposit contains both light and heavy rare earth elements, including neodymium, praseodymium, terbium, and dysprosium, which are critical for permanent magnets used in electric vehicles, wind turbines, electronics and defense systems.

Serra Verde began commercial production in 2024 and is targeting annual output of 6,500 metric tons of total rare earth oxides by the end of next year. The company is also evaluating options to double production capacity within the next four years.

The deal also places Serra Verde among a growing list of rare earth and critical minerals companies receiving direct backing from Washington.

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Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.