Financial support for Serra Verde significantly increased.
The United States is stepping up efforts to secure access to rare earths produced by Serra Verde in Brazil. The Department of War will provide $750 million to a special-purpose vehicle that is set to purchase output from the Pela Ema mine under a long-term offtake arrangement. The original commitment had been $500 million. Together with a bank credit facility of up to $500 million and a Defense Logistics Agency purchase commitment of at least $300 million, the overall structure totals $1.55 billion.
The latest move builds on earlier US support for Serra Verde. In February, the US International Development Finance Corporation committed $565 million in financing to the company. In April, USA Rare Earth announced plans to acquire Serra Verde for around $2.8 billion. At the same time, a 15-year offtake agreement was announced covering Serra Verde’s Phase I production, including neodymium, praseodymium, dysprosium and terbium. Completion of the new financing package clears an important condition for the proposed acquisition. The transaction is expected to close shortly after a USA Rare Earth shareholder vote scheduled for August 28.
Photo: via Canva, Montage rawmaterials.net
