US Backs Brazilian Mine in Push to Break China's Rare Earths Grip
A $465 million investment in Serra Verde's project marks one of the West's biggest moves yet to build a critical minerals supply chain outside of China.
The United States is injecting $465 million into a Brazilian rare earths mine, a decisive financial maneuver aimed at loosening China's stranglehold on the global supply of minerals crucial for defense, energy, and high-tech manufacturing.
The investment, detailed in a Bloomberg report on Friday, will fund the expansion of the Serra Verde mine in Goiás, Brazil. The move by the U.S. International Development Finance Corporation (DFC) is one of the most significant single investments by Washington to date in its escalating campaign to build a secure and reliable supply chain for critical materials among geopolitical allies.
Rare earth elements are a group of 17 metals essential for producing everything from electric vehicle motors and wind turbines to Javelin missiles and advanced electronics. The strategic vulnerability for Western nations is stark: China currently accounts for over two-thirds of global rare earth mining and, more critically, nearly 90% of the complex processing that turns the raw materials into usable high-purity metals and alloys.
This dependency has become a pressing economic and national security concern, a fact underscored by Beijing's decision in October to impose export restrictions on certain rare earth products. That move sent a clear signal to global manufacturers about the potential for supply chain weaponization.
Washington's investment in Brazil is part of a broader, coordinated effort among allied nations to counter this dominance. In late October, G7 nations announced a new Critical Minerals Production Alliance aimed at stabilizing prices and securing long-term supply contracts. The same month, the U.S. and Australia committed to deepening their partnership with joint investments to fast-track the development of alternative mineral projects.
The Serra Verde project, which began commercial production earlier this year, is well-positioned to become a cornerstone of this emerging non-Chinese supply network. The mine is recognized by the Minerals Security Partnership (MSP), a multinational collaboration led by the U.S. to support and de-risk critical mineral projects. With the new funding, the facility aims to ramp up to an annual output of 5,000 tonnes of rare earth oxides.
While Serra Verde alone cannot replace China's output, the U.S. government's backing serves as a powerful signal to private markets, reducing the perceived risk of investing in the capital-intensive and historically volatile rare earths sector. The DFC has also recently committed development funding for other projects in the region, including Aclara Resources' Carina heavy rare earths project in Brazil, indicating a regional strategy to cultivate a South American supply hub.
Analysts note that building a fully independent supply chain—from mine to magnet—will be a decade-long endeavor requiring massive investment in not just mining, but also the technically challenging and environmentally sensitive processing facilities that the West offshored decades ago. However, the substantial financial commitment to Serra Verde demonstrates a clear and accelerating resolve from Washington to rewrite the global map of critical mineral control.