Brazil’s Rare Earth Ambitions Face Critical Test as Viridion Seeks Major Funding

Strategic Funding Milestone

Ionic Rare Earths Limited’s (ASX, IXR) Brazilian joint venture, Viridion, has taken a significant step forward in securing a major funding package worth approximately US$900 million (R$5 billion) from Brazil’s National Bank for Economic and Social Development (BNDES) and the Federal Agency for Funding Authority for Studies and Projects (FINEP). This advancement follows Viridion’s successful progression through the second phase of evaluation and entry into a Joint Support Plan, positioning the venture to negotiate a tailored financial package that blends non-dilutive grants, debt financing, and potential equity participation.

This funding is earmarked to accelerate the development of rare earth refining and magnet recycling infrastructure in Brazil, a country increasingly recognised as a strategic player in the global critical minerals landscape. Viridion’s proposal stood out among competing projects, reflecting the joint venture’s unique technological offering and strategic importance in establishing a sovereign rare earth supply chain in South America.

Building Brazil’s Rare Earth Supply Chain

The Viridion joint venture, equally owned by Ionic Rare Earths and Viridis Mining and Minerals, is focused on developing pilot rare earth refining and demonstration magnet recycling plants. These facilities will be located in Minas Gerais, with the Centre for Rare Earths Innovation, Technology and Recycling (CRITR) set to become South America’s first integrated rare earth refining and recycling hub. Operations are targeted to commence in the second half of 2026, subject to financing and regulatory approvals.

Viridion’s strategy aligns closely with Brazil’s broader industrial policy goals, including the “New Industry Brazil” initiative, which aims to foster vertical integration and downstream processing of strategic minerals. The venture’s technology, developed by Ionic Technologies, enables near-complete extraction of rare earth oxides from end-of-life magnets and mining concentrates, supporting a circular economy approach and reducing reliance on imports.

Global Context and Market Implications

This development comes amid heightened global efforts to diversify rare earth supply chains away from China, which has recently imposed export controls. The United States, Europe, and other Western nations are actively seeking alternative sources to secure critical minerals essential for clean energy technologies, electric vehicles, and defence applications. Brazil’s growing wind energy market and emerging advanced manufacturing sectors further underscore the strategic value of Viridion’s project.

Viridion’s recent delivery of recycled rare earth oxides to Brazil’s only magnet manufacturer, CIT SENAI, marks a tangible milestone in establishing a local supply chain. The joint venture’s access to feedstock from Viridis Mining and Minerals’ Colossus Project enhances its capacity to supply high-purity rare earth products, positioning it as a key player in Latin America’s rare earth industry.

Looking Ahead

As Viridion moves into detailed negotiations with BNDES and FINEP, the finalisation of the funding package will be critical to advancing construction and operational timelines. The combination of government support, innovative recycling technology, and strategic resource access places Ionic Rare Earths and its partners in a strong position to lead Brazil’s rare earth refining and recycling sector, contributing to a more secure and sustainable global supply chain.