The Rede Sustentabilidade party and federal deputy Heloisa Helena (Rede-RJ) filed a lawsuit with the Federal Supreme Court (STF) asking for the suspension of the deal valued at US$2.8 billion. The Claim of Non-Compliance with Fundamental Precepts (ADPF), filed this Friday (24), includes a request for an injunction and requests that no operation capable of transferring economic control over strategic mineral assets belonging to the Union be carried out until the case is judged.
The initiative adds to the movement of deputies allied with the government: Talíria Petrone (PSOL-RJ) and Orlando Silva (PCdoB-SP) contacted the Attorney General’s Office (PGR) in the same direction, also asking for the suspension of the deal, as anticipated by columnist Lauro Jardim.
Located in Minaçu (GO), Serra Verde is the only mining company outside Asia to produce rare earth elements on a commercial scale. On April 20, USA Rare Earth, listed on Nasdaq, announced the acquisition of the Brazilian company through the payment of US$300 million and the issuance of around 126.8 million shares. The deal, expected to be completed in the third quarter of this year, involves an ionic clay mine in the north of Goiás, from where elements used in high-resistance magnets used in electric cars, wind turbines, drones and defense equipment are extracted.
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In the action presented to the STF, Rede Sustentabilidade maintains that the rules and procedures that currently exist in Brazil are insufficient to prevent strategic mineral resources — which belong to the Union — from passing to foreign control. For the party, by allowing the sale in the way it was done, the State would have failed to protect basic principles provided for in the Constitution, such as national sovereignty and economic development guided by the country’s interests.
The Sustainability Network had already taken measures before ADPF joined. The party sent representations to the Federal Audit Court and the Federal Public Ministry pointing out possible regulatory weaknesses in the analysis of changes in Serra Verde’s corporate control, in addition to filing a public civil action in the Federal Court. Representative Heloisa Helena also filed a bill in the Chamber that establishes the National Regime for the Protection of Strategic Minerals.
The race around rare earths gained intensity after China last year restricted exports from the sector, threatening global industrial chains. Brazil occupies a prominent position on this board: it has potential reserves of 21 million tons of rare earth oxides, the second largest stock in the world, behind only China, according to data from the United States Geological Survey.
President Luiz Inácio Lula da Silva commented on rare earths during the week, while visiting Spain. The Brazilian president stated that the government intends to guarantee the country’s sovereignty in the sector. “No one, in our Brazil, will own our mineral wealth”, he stated. The government, however, did not publicly comment on the legal actions and representations presented by the parties.
Request to PGR
Petrone and Orlando Silva asked the PGR to initiate proceedings to investigate the actions of the National Mining Agency (ANM), which has already given approval for the transfer of control of Serra Verde. Parliamentarians argue that the regulatory body’s consent cannot be restricted to a superficial documentary examination and that the lack of verification of compatibility with the public interest represents a defect in the purpose of the administrative act. The deputies also want the PGR to demand detailed information from the ANM and the Ministry of Mines and Energy about the criteria adopted to approve the operation.
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One of the questioned points of the transaction is the support of the Donald Trump government for the buyer USA Rare Earth. The company has financing of US$1.6 billion granted by the American Department of Commerce. Serra Verde also signed, within the scope of the so-called Project Vault — an American initiative to form a strategic stock of critical minerals valued at US$ 12 billion — a loan of US$ 565 million with the US government development agency, the DFC. For Petrone e Silva, the presence of foreign state financing in the purchase of a critical asset constitutes indirect intervention by another nation in Brazil’s strategic sector.
Contacted by GLOBO at the time of the sale, Serra Verde informed that the company resulting from the merger with USA Rare Earth will have access to first-rate separation and processing technologies and will operate the entire production chain, from mining to the manufacture of magnets, with a presence in Brazil, the United States, France and the United Kingdom. USA Rare Earth did not respond to requests for comment.
