Brazil’s rare earths attract Western interest

The movement comes as Brazil’s rare earth reserves draw attention from the U.S. following the tariff war launched by Washington, which turned the group of 17 mineral elements into part of Brazil’s commercial bargaining strategy to reduce tariffs.

Rare earths are a group of chemical elements strategic for the energy transition and defense. They are used in high-tech industries, from wind turbine production to batteries, including those for hybrid and electric vehicles.

In negotiations between China and the U.S. after the tariff war launched earlier this year by President Donald Trump, rare earths are a central point because China holds the world’s largest reserves. The country also dominates nearly the entire supply chain, accounting for 69% of global production and 91% of refining.

China restricted U.S. access to its rare earths in retaliation for tariffs imposed by the Trump administration. More recently, U.S. Treasury Secretary Scott Bessent said he expects an agreement with China on the elements to be concluded soon.

U.S. interest in Brazil’s rare earth reserves stems from the fact that they are the largest outside China and could help reduce U.S. dependence. But Brazil currently has only one commercially operating mine, Serra Verde Pesquisa e Mineração (SVPM), in Goiás. And last year the country accounted for less than 1% of global production.

Seeking international partners in the mining sector is natural, said Ana Paula Repezza, business director at the Brazilian Trade and Investment Promotion Agency (ApexBrasil). She participated this month in an event organized by the European Commission in Brussels, where the agency sought European investment for rare earths and other critical minerals.

“The mineral chain is naturally globalized and, China aside, I don’t think any country in the world can be self-sufficient in capital and technology for exploration and processing along the entire chain,” she said.

Repezza added that foreign investment becomes a viable alternative for projects in pre-operational stages to accelerate development and help reduce risk. “Mining is a very high-risk activity, and the more partners and investors you have, the better,” she said.

Interest has increased due to growing awareness of the importance of critical minerals for the energy transition and recent geopolitical tensions between the U.S. and China over American access to Chinese rare earths.

SVPM secured up to $465 million in financing in August from the U.S. International Development Finance Corporation (DFC) to help expand production of heavy rare earth metals, according to the Financial Times.

Canada’s Aclara Resources, which has a pre-operational project in Goiás, announced in September that it received a commitment of up to $5 million from the DFC for a feasibility study.

Australia’s Viridis Mining and Minerals, with a pre-operational project in Minas Gerais, said on Tuesday (18) that it received a letter of interest from Export Development Canada (EDC) for early support of up to $100 million in debt financing. According to the company, it also received a nonbinding support letter on December 10 from France’s export credit agency confirming eligibility for financing.

In the realm of agreements, goals vary from offtake contracts to future processing and refining. Australia’s St. George Mining, which has a pre-operational niobium and rare earths project in Minas Gerais, announced in September a memorandum of understanding with REAlloys, a major supplier of magnets to the U.S. defense and technology industry, for a potential long-term offtake of up to 40% of its rare earth output.

Australia’s Brazilian Rare Earths (BRE), with a pre-operational project in Bahia, announced last month an agreement with France’s Carester, a specialist in rare earth separation and refining, for a 10-year initial offtake of heavy metals. The French company will also provide services for the development of BRE’s separation refinery planned for the Camaçari Petrochemical Complex near Salvador.

For Elaine Santos, a researcher at Portugal’s National Laboratory of Energy and Geology (LNEG), the relationships Western countries are forging with these Brazilian projects signal an attempt to reorganize the geopolitics of the rare earth supply chain. “It indicates that the U.S. and its allies are trying to reduce dependence on China, which dominates the critical stages of separation, refining and permanent magnet production,” she said.

A specialist in the sociology of energy and strategic mineral resources with postdoctoral research at the University of São Paulo’s Institute of Advanced Studies, she said the dynamic also highlights Brazil’s vulnerability. Despite holding strategic resources—most of which are still only resources, not reserves—Brazil does not control strategic stages of the supply chain.

“It is natural that external actors move early to secure positions from the outset,” she said. “There is clearly a push to secure access to rare earths from the pre-operational phase. Given Brazil’s significant resources, the country has the geological potential to be a strategic player in a market that will only grow,” she added.

The risk, she warned, is that Brazil repeats its “historical trajectory” and stays limited to exporting critical raw materials while other countries consolidate technology, metallization and component production.

But ApexBrasil is working to prevent that, according to Repezza. At the Brussels conference, attracting investment for stages beyond extraction, such as processing and downstream manufacturing, was one of the agency’s main goals. To promote interaction with investors, the agenda included presenting Brazil-based projects to development institutions and public and private banks. Projects by Meteoric, Aclara and St. George, along with others focused on minerals such as silica and graphite, were among them.

“Apex’s strategy for attracting investment in critical minerals is directly linked to the New Industry Brazil program, whose pillars include strengthening the mineral chain,” Repezza said. “The aim is to have as many links in the chain as possible operating within Brazilian territory.”

The proposed National Policy for Critical and Strategic Minerals, now moving through Congress and intended to define the policy’s principles, was also presented by the Ministry of Mines and Energy during ApexBrasil’s meetings in Europe.

“We are revising our regulatory framework for critical minerals mining to make the exploration licensing process even more investor-friendly, which is important news for foreign investors,” she said.

Bryan Harris, managing partner at Sabio, a consultancy focused on Latin America, said the West has recognized Brazil as an “excellent” potential partner. “Western nations have finally realized that they must diversify their supply of critical minerals, and quickly.”

He said the growing engagement with Brazilian projects shows how seriously these countries are treating the issue. Developing rare earth supply chains outside China will take years, require deep reforms and involve complex coordination among countries, he added. “But the fact that money is already beginning to flow shows that this has become a geopolitical and industrial priority for Western nations.”

Goiás recently signed memorandums of understanding with Japan’s Organization for Metals and Energy Security (Jogmec) and with the U.S. State Department’s Bureau of Economic, Energy and Business Affairs to advance rare earth development in the state, according to Adriano da Rocha Lima, Goiás’s secretary-general of Government.

With Japan, the state hopes to attract investment to move projects further along the processing chain. With the U.S., the goal is technological cooperation and potential knowledge exchange.

“It is still an initial outline, meant to establish a basis for more detailed discussions, which is what is happening now in both cases. We are moving into the phase of defining objectives, targets and financial matters. Discussions with Japan are more advanced, and yes, there is a prospect of financial investment, but no amount has been set,” Rocha Lima said.

The state also enacted a law in August creating the Goiás Authority for Critical Minerals (Amic-GO) and defining strategic minerals, including rare earths, niobium, nickel, copper and titanium. The authority will coordinate development of a state policy for critical minerals and establish a state fund to support the sector.