The U.S. War Department will spend $750 million to lock in rare‑earth minerals from a Brazilian mine, ending reliance on China.
Secure Supply Chain for National Defense
The pre‑payment guarantees a buyer for Serra Verde Group’s Pela Ema mine in Goiás, Brazil, creating a domestic source for the four magnetic rare‑earth elements—neodymium, praseodymium, terbium and dysprosium.
These elements power permanent magnets used in defense hardware, renewable energy systems, medical devices and critical infrastructure, according to the Pentagon.
“Securing resilient domestic and allied supply chains is a fundamental warfighting requirement,” said Hon. Michael Cadenazzi, Assistant Secretary of War for Industrial Base Policy. “By partnering with Serra Verde, we are taking a decisive step to break our adversaries’ near‑monopoly on rare‑earth elements.”
The agreement forms part of a $1.55 billion Pentagon capitalization package that includes a $500 million secured revolving credit facility and a $300 million five‑year contract to purchase rare‑earth products.
China controls about 90 percent of global refined rare‑earth output in 2024, the International Energy Agency reported, underscoring the strategic risk of dependence on a single supplier.
Once operational, the mine will supply the thermal stability and magnetic strength needed for neodymium‑iron‑boron magnets that power nuclear submarines, fighter jets, satellites, guided missiles, combat vessels and drones, the Pentagon said.
Deal Advances USA Rare Earth Acquisition
The transaction follows a $565 million financing package from the U.S. International Development Finance Corporation that allowed Serra Verde to sever ties with Chinese investors.
USA Rare Earth, an Oklahoma‑based miner, will acquire Serra Verde Group for roughly $2.8 billion, combining $300 million cash with 126.849 million newly issued shares, according to the companies.
“Serra Verde can now begin supplying these critical materials into the U.S. market and is positioned to be the first to deliver all four into Western supply chains at scale,” said Michael Blitzer, executive chairman of USA Rare Earth.
The company expects to close the acquisition within days, gaining advanced processing technologies and integrating the Pela Ema mine into its mine‑to‑magnet platform.
