Lula da Silva calls sale of rare earths mining company to US disgrace

RIO DE JANEIRO, April 23. /TASS/. Brazilian President Luiz Inacio Lula da Silva has blasted the sale of Brazilian rare earth metals producer Serra Verde to the American mining company USA Rare Earth. He accused former governor of the Goias state Ronaldo Caiado, who signed the agreement, of abuse of authority. "Caiado has entered into an agreement with American companies, which he has no right to do, since the issue of resources [is the responsibility of] the federal government. If we don't move proactively, people like him will sell Brazil. We cannot allow this," the Brasil 247 portal quoted him as saying. The head of state said the agreement was a disgrace, but did not indicate whether the federal government would try to review it. The Brasil 247 portal added that "sharp debates about national sovereignty" and control over strategic resources have already arisen in the Brazilian government. As stated in article 20 of the Brazilian constitution, mineral resources, including those in the subsoil, are the exclusive property of the Union. According to the ninth paragraph of this article, the disposal of these resources is the responsibility of the federal government. This provision of the country's basic law calls into question the legality of any independent agreements between the states of the country and foreign companies covering mining strategic raw materials such as rare earths. USA Rare Earth struck a $2.8 billion deal to acquire 100% of the shares in Serra Verde in an effort to help the United States and its allies reduce their dependence on rare earth supplies from China. The Brazilian company is the only major manufacturer outside of Asia capable of supplying the four main elements needed to create permanent magnets: neodymium, praseodymium, dysprosium and terbium. Serra Verde is expected to account for more than 50% of the supply of heavy rare earth metals outside China by 2027. The deal is supported by the US government and includes a 15-year contract with fixed minimum prices for the metals.