US offers Serra Verde $565 million in financing and a stake option

The U.S. Government has signed a $565 million financing agreement with Brazilian miner Serra Verde. This includes an option to acquire a minority stake in the company.

The deal forms part of the?a?wide-ranging package announced by U.S. vice president JD Vance on Wednesday to create a preferential trading bloc for essential minerals and to set price floor as Washington intensifies efforts to loosen China’s grip on critical materials vital to advanced manufacturing.

Serra Verde, a privately-held company, will use the U.S. International Development Finance Corporation funding to refinance loans at better terms and expand production.

Negotiations involving minorities

CEO Thras Mouritzis said that the?two parties were in the process negotiating details for a minor stake. This was expected to be 'agreed within a few months.

He said: "It wouldn't be a big stake. It would be a significant minority stake. But it wouldn't be out of line with what the U.S. Government has taken in other companies."

The government of the United States agreed to a multi-billion dollar package with MP Materials in July last year, which included a 15% stake.

The U.S. stakes of other companies that produce critical minerals have been low teens or single digits.

Moraitis said in December that Serra Verde has shortened the contract terms of its Chinese-processing deals so they will end this year. This opens up the possibility to supply Western companies.

He said that he would not provide any further details.

Serra Verde’s mine is rich with heavy rare earths - unlike many Western deposits. This makes it especially attractive.

Dysprosium, terbium and heavy rare earths could face shortages in the future. This would be a major obstacle to creating domestic supply chains for rare?earths.

The company began commercial production early in 2024 and has yet to reach its full capacity, which is expected to be around 6,500 metric tonnes of rare earth oxides per year by 2027.

Serra Verde's owners are private equity firms Denham Capital and Energy and Minerals Group, as well as Vision Blue, led by Mick Davis, the former CEO of Xstrata. (Reporting and editing by Bernadettebaum and Alex Richardson; Eric Onstad)

(source: Reuters)