Aclara Resources is in talks with US government agencies for possible financing toward its $1.5-billion plan to mine rare earths in Latin America and develop processing facilities in the US.

The company is looking to leverage efforts by Western governments to reduce reliance on China, which currently makes about 90% of the world’s rare earth permanent magnets.

Aclara has filed funding submissions with US agencies and is preparing to present its case in Washington, CEO Ramon Barua said in an interview. The firm sees an opportunity after the Pentagon’s recent arrangement to take a stake in the only US producer, MP Materials.

“Those conversations right now are private, but a project like ours definitely catches the attention of the administration,” he said. “So we’re trying to explore together with them if there’s an opportunity to join forces.”

Aclara is 57% owned by the Hochschild Group and trades in Toronto, where it has a market value of about $245-million. The firm, which doesn’t generate revenue, has two development-stage projects — one in Chile and one in Brazil.

Barua declined to say which agencies Aclara is dealing with or what form financing could take. He did make note of grants and loans offered by the Department of Defense as well as the Energy Department and the US International Development Finance Corporation, as well as the Pentagon’s $400-million equity investment in MP Materials earlier this month to fund a major new magnets plant.

That deal implies prices that are double those in China, and the new US facility would need the kind of elements that Aclara plans to mine in Brazil and Chile.

“We have something that is perfectly complementary to their MP Materials deal,” he said.

Aclara wants to begin tapping ionic clay deposits in Chile and Brazil by 2028, supplying elements used in applications such as electric vehicles and wind turbines. “If we want to meet that goal, we need to have significant funding between now and the end of the year.”

Besides the extraction projects in Chile and Brazil, Aclara is considering locations for a processing plant in the US, with Louisiana, Texas, South Carolina and Virginia all candidates. It also has an accord with German magnet maker Vacuumschmelze GmbH, which is set to build a facility in South Carolina.

To be sure, it’s not the first time rare earths have captured global attention. In the early 2010s, companies including Molycorp rode a wave of investor interest, until the market crashed as more supply came on and consumers switched to cheaper alternatives.

The industry still faces plenty of hurdles beyond pulling elements out of the ground such as competing with China in processing and creating a price benchmark outside China’s opaque market.

But a recent uptick in geopolitical tensions — after China imposed restrictions on exports and the US announced the MP Materials deal — is changing the tone of conversations with prospectives investors, Barua said. Previously talks focused on prices. Now, investors are more concerned about how soon projects can get started, he said.

“For projects like ours that require funding and offtake agreements, recognizing that the price of these elements is significantly higher than what the Chinese suggest, is very important,” he said.