Meteoric Resources is finding it difficult to find local financing for its $420-million rare earth project in Brazil, pushing the Australian firm to expand its search for investors beyond the South American nation.

Scarce funding in Brazil is prompting Meteoric and other small mining firms operating in the country to consider sales deals tied to future output as collateral for international loans. The industry says that undermines Brazil’s ambitions of playing a bigger role in developing an industry around rare earth elements — a group of 17 minerals that play a key role in defense and other high-tech sectors — as Western nations seek to diversify supply chains away from China’s dominance.

“If we can’t get financing in Brazil, we’ll have to finance abroad and the guarantee will be offtake, sending production to other countries,” Meteoric executive director Marcelo Carvalho said in an interview on the sidelines of a conference in Rio de Janeiro. “We want to develop the production chain in Brazil, but I work to make the project profitable to shareholders.”

Carvalho’s criticisms echo those of other miners attending an event hosted by Brazil’s development bank, BNDES. Meteoric and peers including Viridis Mining and Minerals and Serra Verde Group are candidates for five-billion reais ($850-million) in financing for strategic minerals projects offered by BNDES and government funding agency Finep.

Getting financing is a challenge because Brazil doesn’t accept mining rights or future output as collateral and the country’s development bank has strict rules around using such pledges for private funding, according to Rinaldo Mancin, an executive director of Brazilian mining association Ibram. That means the only option is getting a letter of guarantee from a bank.

Meteoric has a $250-million non-binding support letter from the Export-Import Bank of the United States and has been in talks with the US International Development Finance Corp to support its Caldeira project in southeastern Brazil. The miner will start delivering 11 000 t of rare earth oxide from the project starting in 2027, Carvalho said. The firm plans to produce a refined mixed rare earth carbonate and, in future, advance to separate the oxides in Brazil. The first license for the project is expected in the next two months, he said.

Brazil has the world’s second-largest reserves of the 17 rare earths elements, according to the US Geological Survey. The race for minerals is in the spotlight as US President Donald Trump pushes for a natural resources deal with Ukraine and shows interest in Greenland’s metal riches.