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The US government just wrote a very large check to make sure it never has to ask China for the minerals inside fighter jets and electric vehicles. On August 24, the Department of War increased its commitment in a special-purpose vehicle called US SIIE LLC from $500 million to $750 million, bringing total capitalization for Brazil’s Serra Verde rare-earth mine to $1.55 billion.
That financing package also includes $300 million from the Defense Logistics Agency for guaranteed purchases over five years and up to $500 million in bank credit.
What Serra Verde actually produces, and why it matters
Serra Verde, located at the Pela Ema mine site in Brazil, started commercial production in early 2024. It holds the distinction of being the only commercial-scale producer of magnetic rare earth elements outside Asia.
China controls roughly 60-70% of global rare earth mining and an even larger share of processing. The minerals produced at Serra Verde, including neodymium, praseodymium, dysprosium, and terbium, are essential ingredients in the permanent magnets found in everything from missile guidance systems to wind turbines.
The mine is targeting output of approximately 6,400 tonnes of total rare earth oxides per year by the end of 2027, spread across a projected 25-year mine life. The 15-year offtake agreement tied to the new financing secures price floors at $110/kg for neodymium-praseodymium (NdPr), $575/kg for dysprosium, and $2,050/kg for terbium.
First deliveries under the offtake agreement are expected to begin in Q4 2026.
The $2.8B acquisition tying it all together
The financing expansion didn’t happen in isolation. Back in April 2026, USA Rare Earth announced a $2.8 billion acquisition agreement for Serra Verde, structured as $300 million in cash and 126.9 million shares. The deal is designed to vertically integrate Brazilian mining output with US-based processing and manufacturing.
That deal took a meaningful step forward on the same day the Department of War announced its expanded commitment. Brazil’s antitrust authority, Cade, archived its review of the acquisition on August 24, clearing a key regulatory hurdle. A shareholder vote is scheduled for August 28, suggesting the deal is close to completion.
Post-acquisition, Serra Verde stakeholders would hold approximately 34% of the combined entity.
The financing trail stretches back further. In February 2026, Serra Verde secured a $565 million loan from the US International Development Finance Corporation, an increase from an initial $465 million commitment.
Why the US is spending billions on magnets
Neodymium and praseodymium are the key ingredients in NdFeB magnets, the strongest permanent magnets available. They’re inside the motors of F-35 fighter jets, Tomahawk cruise missiles, and Virginia-class submarines. They’re also in every EV motor and most wind turbine generators. Dysprosium and terbium make those magnets work at high temperatures, which is particularly important for military and automotive applications.
The scale of US government involvement in Serra Verde, spanning the Department of War, the Defense Logistics Agency, and the DFC, signals that Washington views this as a national security priority rather than a simple commercial investment. Guaranteed five-year purchase commitments from the DLA effectively give the mine a captive customer in the Pentagon.
At $110/kg for NdPr and $575/kg for dysprosium, the US government is essentially telling the market what it considers a fair price for supply chain security.
Disclosure: This article was edited by Editorial Team. For more information on how we create and review content, see our Editorial Policy.
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