US Government Equity Stakes in Brazil Rare Earths and Mozambique Graphite Lack Accountability Framework
Washington has committed public funds to two unlisted or privately held critical mineral projects with no clear oversight structure in place.
A War on the Rocks analysis published Monday (2026-09-21) raised pointed questions about how the United States government has structured its equity positions in two critical mineral projects: the Balama graphite mine in Mozambique and a heavy rare earths producer in Brazil. Neither investment, the analysis found, was subject to the kind of governance standards that comparable domestic transactions would require.4
The Mozambique position runs through Twigg Exploration, the unlisted Mozambican subsidiary of ASX-listed Syrah Resources, which operates Balama. The Brazil stake targets Serra Verde, a heavy rare earths producer that was privately held when Washington committed funding. Neither structure provides the disclosure or board oversight that listed equity ownership ordinarily demands.4
Serra Verde's deposit is rich in heavy rare earths — materials China has restricted through export controls in its ongoing trade confrontation with Washington. Foreign Policy reported in June (2026-06-02) that one participant in the Brazil deal described the country as sitting "right at the nexus of the critical supplies we need outside of China." The strategic rationale was visible. The governance architecture was not.3
Graphite tells a parallel story. Balama is among the world's largest natural graphite operations, and graphite is the dominant anode material in lithium-ion batteries. China has used its grip on graphite processing as a second lever against US battery supply chains. Washington's bet on Twigg is a direct countermove. But an unlisted subsidiary offers no public financials, no independent audit trail and no transparent mechanism for monitoring whether US government capital is being deployed as intended.4
The instrument behind much of this push is the US International Development Finance Corporation. The Economist reported in May (2026-05-19) that the DFC's loan book may soon rival the World Bank's, with financier Ben Black central to its expanding remit. Scale has grown faster than the oversight architecture around it.1
That gap creates practical problems for energy and industrial buyers trying to assess offtake security. A US government equity stake signals political backing, but it does not substitute for audited accounts or a defined exit mechanism. If either project encounters the kind of cost overrun, permitting delay or geotechnical setback that is routine in greenfield mining, the chain of accountability for the public funds committed is unclear.4
The broader investment policy trend runs the other way. UNCTAD data show that 63% of global investment flows were subject to a screening regime last year, up from 52% in 2020. Most major economies have been tightening scrutiny of both inbound and outbound capital in sensitive industries. Washington's critical mineral equity bets have moved in the opposite direction.2
The DFC expansion is deliberate. The Trump administration has used development finance as a foreign policy instrument — to secure supply chains, displace Chinese investment and build bilateral economic leverage in contested regions. Latin America and southern Africa are both active theatres in that competition. The DFC's intervention in Serra Verde and Balama follows the logic of that strategy precisely.1
But the urgency of the supply chain rationale and the quality of individual investment governance are not the same question. Speed and opacity may serve diplomatic purposes. They sit less comfortably with the standards that US institutions typically apply when committing taxpayer-backed capital to equity positions in foreign companies operating in jurisdictions with their own political and regulatory risks.4
Serra Verde's deposits and Balama's reserves are real assets. What the Monday (2026-09-21) analysis leaves unresolved — and what neither the DFC nor the broader US government appears to have answered publicly — is which agency holds formal oversight of these equity positions, under what reporting obligations they sit, and what valuation or exit frameworks apply if either asset deteriorates. Mining projects fail at a higher rate than most strategic planners allow for. That question will not stay dormant indefinitely.4