The critical minerals sector is increasingly being driven by governments, export-credit agencies, development finance institutions, sovereign investors, defence departments, and industrial buyers seeking to secure supply ahead of future disruptions. The shift is particularly pronounced in Europe, where industrial demand is strong but domestic mining, refining, and processing capacity remains limited. This imbalance has contributed to the formation of an allied capital network spanning the United States, Canada, Australia, Europe, Japan, South Korea, and selected partner jurisdictions, designed to reduce reliance on China.
The financing model has moved away from traditional commodity-cycle investment toward structures based on public-risk sharing, offtake agreements, price floors, export-credit guarantees, strategic stockpiles, development-bank lending, state-backed equity, and industrial procurement frameworks. Capital is increasingly directed toward projects supplying materials for defence systems, electric vehicles, wind turbines, semiconductors, batteries, power grids, artificial intelligence infrastructure, and advanced manufacturing.
G7 production targets and investment pipeline
The G7 Critical Minerals Resilience and Production Alliance, agreed in June 2026, established targets to reduce reliance on any single supplier outside the G7 and partner countries for rare earths and permanent magnets to below 60% by 2030, with a longer-term target of 50%. The agreement referenced 195 projects announced since the beginning of 2026, representing €64bn in investment across critical minerals value chains, including equity participation and offtake agreements.
The framework identifies financing mechanisms including equity investment, guarantees, offtake arrangements, price-gap subsidies, joint procurement, quotas, price floors, stockpiling, traceability systems, and coordinated export-credit support. These instruments are designed to support higher-cost Western supply chains competing with established processing systems.
United States-led financing structures and consortium model
The United States has advanced a coordinated financing structure through the Orion Critical Mineral Consortium, formed by Orion Resource Partners, the US International Development Finance Corporation, and Abu Dhabi’s ADQ. The consortium was established with $1.8bn in initial commitments, with each party contributing $600mn, and has a long-term deployment target of up to $5bn. The strategy focuses on near-term production assets rather than early-stage exploration projects.
A key precedent in US critical minerals financing is MP Materials, operator of the Mountain Pass rare earth mine in California. In July 2025, MP Materials announced a public-private partnership with the US Department of Defense involving a $400mn preferred equity investment, a 10-year price floor of $110/kg for NdPr products, a $150mn loan for heavy rare earth separation expansion, and a $1bn financing package from JPMorgan Chase and Goldman Sachs for a planned magnet facility. The Department of Defense committed to purchasing 100% of magnets produced from the facility for 10 years.
Consolidation of rare earth supply chains in the Americas and Europe-linked jurisdictions
USA Rare Earth agreed in April 2026 to acquire Serra Verde Group in a transaction valued at approximately $2.8bn, comprising $300mn in cash and 126.849mn newly issued shares, with closing expected in Q3 2026. Serra Verde operates the Pela Ema rare earth mine in Goiás, Brazil, and is expected to produce around 6,400 tonnes per year of total rare earth oxides by end-2027 Phase 1 capacity, including neodymium, praseodymium, dysprosium, and terbium.
The project has secured a $565mn financing package from the US International Development Finance Corporation and a 15-year offtake agreement covering 100% of Phase 1 production through a US-backed special purpose vehicle with price floors for Nd, Pr, Dy, and Tb.
USA Rare Earth has also acquired Less Common Metals in the United Kingdom for $100mn in cash plus 6.74mn shares, and taken a 12.5% stake in Carester in France for about €40mn, building an integrated mine-to-magnet supply chain alongside magnet production in Stillwater, Oklahoma.
Greenland rare earth consolidation and offtake agreements
Critical Metals Corp., listed on Nasdaq, is consolidating the Tanbreez rare earth project in southern Greenland through an all-stock acquisition of European Lithium valued at approximately $835mn. The project has received a US Export-Import Bank letter of interest for a potential $120mn 15-year loan.
Tanbreez holds a resource base of approximately 44.9mn tonnes grading 0.38% TREO, with more than 25% heavy rare earth content within its rare earth mix. The project is located in the Ilímaussaq intrusive complex in southern Greenland near Qaqortoq and contains zirconium, niobium, tantalum, hafnium, and gallium.
Critical Metals has signed a 15-year offtake agreement with REalloys covering up to 15% of Phase 1 production and a 10-year agreement to supply up to 10,000 tonnes per year of concentrate to Ucore Rare Metals’ planned Louisiana processing facility.
Canadian critical minerals financing and EU cooperation
At PDAC 2026 in Toronto, the European Investment Bank and the Government of Canada signed a Letter of Intent to explore cooperation on critical raw materials, enabling potential EIB operations in Canada aligned with EU strategic objectives.
Canada’s Critical Minerals Production Alliance announced a second round of 30 partnerships and investments, targeting $12.1bn in projects with 12 allied partners. Combined with earlier commitments, the program is mobilising approximately $18.5bn across battery materials, graphite, lithium processing, site restoration, by-product recovery, and offtake-linked industrial projects.
Neo Performance Materials, headquartered in Toronto and listed as TSX: NEO, opened a rare earth magnet plant in Narva, Estonia, in September 2025. The facility has initial capacity of 2,000 tonnes per year of sintered NdFeB magnets, expanding toward 5,000 tonnes per year, supported by a US$50mn credit facility from Export Development Canada.
Torngat Metals’ Strange Lake rare earth project in Québec and Labrador has signed a memorandum of understanding with Vacuumschmelze of Germany to supply separated rare earth oxides, including both light and heavy rare earths.
Australia’s export finance and processing expansion
The EU-Australia trade agreement, concluded in March 2026, expands access to Australian critical minerals including lithium, rare earths, tungsten, nickel, cobalt, copper, and antimony, while strengthening investment frameworks. Australia’s Critical Minerals Strategic Reserve, valued at A$1.2bn, targets antimony, gallium, and rare earth elements, using forward contracts, stockpiling, and supply agreements with allied partners.
Arafura Rare Earths’ Nolans project reached final investment decision in May 2026 with development costs of approximately $1.6bn. It is designed to produce around 4,440 tonnes per year of NdPr oxide, with production expected from mid-2029. Offtake agreements include Hyundai, Kia, Siemens Gamesa, and Traxys, supported by export-credit agencies. Iluka Resources’ Eneabba refinery is backed by a A$1.25bn Australian government loan through the Critical Minerals Facility. Lynas Rare Earths continues as a major non-Chinese supplier with operations across Mount Weld and Malaysia, supported by Japanese-linked structures including JARE, JOGMEC, and Sojitz.
European financing instruments and project development
The European Investment Bank (EIB) is financing critical raw materials projects including Vulcan Energy’s Lionheart lithium project in Germany and Keliber in Finland. Germany’s KfW Raw Materials Fund has committed up to €150mn to Vulcan’s German subsidiary.
Bpifrance Assurance Export provided a €312.5mn strategic projects guarantee for Vulcan Energy, while Finnvera, SACE, Export Development Canada, EIFO, and EFA Australia participate in allied financing structures.
The Vulcan Lionheart project has a total financing package of approximately €2.2bn and is designed to produce 24,000 tonnes per year of lithium hydroxide monohydrate.
Keliber, controlled by Sibanye-Stillwater with Finnish Minerals Group (20%), targets 15,000 tonnes per year of lithium hydroxide monohydrate and around 140,000 tonnes per year of spodumene concentrate, supported by approximately €783mn in construction investment and up to €500mn in financing. The EMILI lithium project in France, developed by Imerys, includes a €50mn state investment and targets 34,000 tonnes per year of lithium hydroxide, with production expected around 2030.
Graphite, copper, and European industrial supply chains
Talga Group’s Vittangi Anode Project integrates the Nunasvaara South graphite deposit with a refinery in Luleå, targeting 19,500 tonnes per year of active anode material. It has received €70mn from the EU Innovation Fund and a €150mn EIB senior debt package.
InfraVia Capital Partners’ Critical Metals Fund, backed by €500mn from the French state, targets €1.5bn–€2bn. It invested SEK 420mn (~€39mn) in Gruvaktiebolaget Viscaria, a Swedish copper project expected to produce 120,000 tonnes per year of copper concentrate (around 26,000 tonnes of contained copper) with an offtake memorandum with Aurubis AG and production targeted for 2028.
EU procurement and demand aggregation
The EU Raw Materials Mechanism, launched in April 2026, aggregates European demand for rare earths, battery materials, and defence raw materials, improving visibility of industrial supply requirements.
Allied capital structure across jurisdictions
The allied system combines US price floors and defence procurement, Canadian resource development and export finance, Australian production and reserves, European industrial demand and processing capacity, and Japanese and South Korean offtake commitments.
Key integrated chains include Arafura Nolans (Australia–Korea–Germany), Vulcan Energy (Germany–France–Australia), Neo Narva (Canada–Estonia), Tanbreez (Greenland–US–Louisiana), Serra Verde (Brazil–US–UK–France), and Viscaria (Sweden–France–Germany).
