The U.S. Department of War has announced a $750 million investment to secure supplies of rare-earth elements from Serra Verde’s Pela Ema project in central Brazil.
The funding will be provided to US SIIE, LLC through the Industrial Base Analysis and Sustainment (IBAS) program and will support an offtake agreement for mixed rare-earth carbonates produced at the project.
$1.55 billion package to secure rare-earth supplies
The $750 million investment is part of a broader $1.55 billion financing package assembled by the Department of War’s Economic Defense Unit. It also includes a $300 million purchase commitment from the Defense Logistics Agency and a $500 million commitment from a major U.S. bank.
The initiative aims to establish a more secure supply chain for rare-earth elements used in defense and other strategic industries.
Serra Verde’s Pela Ema project is expected to produce dysprosium, terbium, neodymium, and praseodymium. These elements are used to manufacture high-strength permanent magnets and other components for advanced technologies.
U.S. seeks to reduce dependence on China
The investment is part of Washington’s efforts to reduce U.S. dependence on China for rare-earth materials and develop alternative supply chains.
The deal follows a $565 million financing agreement between Serra Verde and the U.S. International Development Finance Corporation (DFC) to optimize and expand the Pela Ema project.
Rare-earth elements are used in neodymium-iron-boron (NdFeB) magnets found in a range of defense systems, including fighter aircraft, nuclear submarines, satellites, guided missiles, naval vessels, and drones.
The materials are also important for energy infrastructure, transportation, aerospace and electronics.
Separately, the U.S. Department of Commerce is working to establish a non-Chinese supply chain covering rare-earth extraction, processing, and magnet manufacturing.