Export Finance Australia (EFA), Australia’s export credit agency, announced this week its intention to support two Australian rare earth mining companies in developing projects in Brazil.

The EFA signed two Letters of Support to finance projects by Viridis Mining And Minerals Ltd and Meteoric Resources, indicating funding support of US $50 million for each company. The non-binding deals will finance the development of rare earth elements mines in Brazil, which holds the most reserves of the crucial minerals in the world after China. 

Viridis Mining And Minerals will use the funds to develop its Colossus mining project in Poços de Caldas, in south-eastern Brazil, which is estimated to have as much as 200.6 million tonnes of ore reserves. The company said it believes the reserve contains four key rare earth elements – neodymium, praseodymium, dysprosium and terbium – whose magnetic properties are crucial for electric vehicle (EV) engines and medical technology. 

Meteoric Resources’ funding will go towards its Caldeira project, also near Poços de Caldas. The mine will produce a refined mixed rare earths carbonate (MREC) in a less carbon-intensive way than similar projects elsewhere, according to the company.

The investment comes at a crucial time for rare earths. China, by far the largest global exporter of the resource, has been increasingly enacting export controls, leading to supply chain disruptions and uncertainty. Australia has the fourth-largest rare earth reserves in the world, but they still amount to less than a third of Brazil’s total reserves and about a tenth of China’s.

The EFA’s investment is likely to secure Australia’s access to the minerals by diversifying its supply chains, ensuring the Australian manufacturing and metals refining export businesses are not disrupted by China’s export restrictions.