Viridis Mining and Minerals (ASX:VMM) has secured Brazilian government funding for its flagship Colossus Rare Earth Project, as the country looks to accelerate development of its vast critical mineral resources.
CEO Rafael Moreno told Bloomberg on Tuesday that Brazilian development bank BNDES has approved a 77.5 million reais ($21 million) loan to support a research centre and its newly opened demonstration plant at Colossus.
Located in Minas Gerais, Colossus is an ionic adsorption clay (IAC) rare earth project covering 228.62km² of licences within and around the Poços de Caldas Alkaline Complex.
IAC deposits can offer advantages over conventional hard-rock deposits, including shallow open-pit extraction and potentially simpler processing.
Viridis acquired Colossus in 2023 and has since undertaken an aggressive exploration program to define the project’s resource potential.
An update last year placed the resource at 493 million tonnes (Mt) grading 2,508 parts per million total rare earth oxides (TREO), which Viridis says makes Colossus the world’s largest undeveloped IAC rare earth deposit outside China.
Funding package builds
The BNDES support comes weeks after Viridis secured a US$120 million ($166 million) funding package for Colossus, led by a US$75 million equity commitment from One Investment Management, the alternative investment manager co-founded by former SoftBank executive Rajeev Misra.
Viridis says the funding exceeded the amount required to cover the targeted 30% equity component of the project’s financing.
With the BNDES facility, the company estimates its remaining debt requirement to fully fund construction of Colossus has fallen to around US$280 million.
According to Viridis, it is still in discussions with BNDES and financial institutions in Europe, Australia, and Canada over larger-scale debt financing for the project’s commercial plant, which is scheduled to begin production in the second half of 2028.
“We’re hoping to finalise in the next month, six weeks maximum, for the other funding,” Moreno told Bloomberg.
He added that Viridis is also holding discussions with BNDES’s investment arm, BNDESPar, over a potential equity investment in the company.
Financing talks advance
The Perth-based rare earth developer has also submitted its final Feasibility Study, clearing the way for potential lenders to conduct due diligence before presenting financing term sheets.
Beyond BNDES, Viridis has secured funding support from Export Finance Australia, Export Development Canada, and France’s Bpifrance.
Representatives from the European Investment Bank and US International Development Finance Corporation have also visited the Colossus site, according to Moreno.
The international interest comes as Western governments look to develop rare earth supply chains outside China, which dominates global processing and magnet manufacturing.
Brazil pushes critical minerals development
The BNDES financing also forms part of Brazil’s broader effort to develop its significant rare earth resources, which rank just behind China as the world’s second largest.
Brazil’s Congress last week approved a critical minerals bill designed to support development of strategic mineral resources while giving the government greater oversight of mining transactions, including supply agreements.
The new legislation is expected to provide greater legal clarity around several critical minerals including nickel, lithium, and rare earth elements.
According to the US Geological Survey, Brazil has an estimated 21Mt of rare earth reserves, which remain vastly untapped given the country only has one commercial mine.
Write to Jackson Chen at Mining.com.au
Image: Viridis Mining and Minerals
