The Department of War just put $750 million behind a Brazilian mining project to help end America’s reliance on China for the rare earth metals used in weapons, jets, and electronics.
Quick Take
- The Department of War announced a $750 million investment with US SIIE, LLC on August 24, 2026.
- The money backs an offtake deal for rare-earth carbonates from Serra Verde’s Pela Ema Project in Brazil.
- The investment is part of a larger $1.55 billion package that includes government and private bank funding.
- The government’s commitment grew $250 million past the amount first planned.
- The deal fits a fast-growing pattern of federal spending meant to break China’s grip on rare earths.
Pentagon Commits $750 Million to Brazilian Rare-Earth Project
The Department of War announced on August 24, 2026, that it will invest $750 million with US SIIE, LLC through its Industrial Base Analysis and Sustainment program. The funds support an offtake agreement for mixed rare-earth carbonates produced at Serra Verde’s Pela Ema Project in central Brazil. These carbonates are raw materials needed to make powerful magnets used in fighter jets, missiles, and electric motors.
Mixed rare-earth carbonates are not finished products. They are processed further into metals and magnets. By locking in a supply deal with Serra Verde, the Pentagon aims to secure a steady flow of these materials without depending on Chinese refiners, who currently dominate nearly every stage of the rare-earth supply chain.
Deal Structure Includes Bank and Defense Logistics Agency Funding
The $750 million is only part of a bigger $1.55 billion financing package. It includes a $300 million purchase commitment from the Defense Logistics Agency and a $500 million commitment from a money-center bank that has not been publicly named. USA Rare Earth, the company tied to the project, confirmed that the special purpose vehicle set up to manage the deal has finished its capitalization.
USA Rare Earth also disclosed that the government’s $750 million commitment is $250 million more than the $500 million originally planned under the offtake agreement. The company did not explain in detail why the number grew, but the increase shows the government expanded its role in the deal as it moved toward closing.
Part of a Broader Push to Break China’s Grip on Rare Earths
Reuters reported in April 2026 that Serra Verde signed a 15-year agreement to supply the first phase of production from its Pela Ema mine to a special purpose vehicle funded by the U.S. government and private investors. An investor presentation from the same month described Serra Verde as the only large-scale producer of all four magnetic rare earth elements outside Asia, making it a rare alternative to Chinese suppliers.
This deal is not an isolated move. The Center for Strategic and International Studies estimates that announced U.S. government non-equity investment in rare earth projects reached about $7.6 billion from the start of 2025 through June 2026. That is a 321 percent jump from the $1.8 billion spent between 2020 and 2024, showing how quickly Washington has ramped up direct financial support for this industry.
The public record does not yet include the full offtake contract, the identity of the bank providing $500 million, or a breakdown of how the money will be paid out over time. Those details remain with the Department of War, the Defense Logistics Agency, and the companies involved.
For taxpayers watching defense spending grow while household budgets tighten, deals like this raise a familiar question: is this smart planning for national security, or another example of the government committing large sums with limited public visibility into the terms? Both concerns can be true at once, and the answer will likely depend on how the material actually gets produced and delivered in the years ahead.
Sources:
insidedefense.com, war.gov, sec.gov
