The company is in talks with international groups to finance the construction of an industrial complex to process the rare earth elements.

“The scale of the project, with more than 91,000 hectares across 57 mining rights, along with the results we have so far, point to the potential for a world-class project,” said Túlio Rivadávia Amaral, CEO of Cabo Verde Mineração.

Ionic clay is a type of clay that contains rare earth ions and is used in energy transition technologies, wind power generation, high-efficiency motors, electric vehicle batteries, advanced electronics, and other applications. In the Alvo Botelhos area, tests indicated the presence of high-value magnetic elements such as neodymium, praseodymium, dysprosium, and terbium, according to Rivadávia.

Exploration at Alvo Botelhos is being conducted alongside drilling at Alvo Caconde 1, located in the same Poços de Caldas complex, where the company initially pursued an iron ore project.

The targets lie within a block of approximately 91,000 hectares covering four municipalities in Minas Gerais—Muzambinho, Cabo Verde, Campestre, and Botelhos—as well as Caconde in São Paulo state. Rivadávia said the mining company holds 57 mineral rights for exploration in the region.

Among the technical results from priority targets are intervals of 16 meters with average grades of 2,245 parts per million of total rare earth oxides (TREO), including readings of 4,302 ppm TREO and 854 ppm magnetic rare earth oxides (MREO).

“Anomalies are distributed across all four quadrants of the surveyed areas, with results reaching as high as 14,000 ppm and significant recurrence in the 3,000-ppm range,” said Oscar Yokoi, a geologist and technical consultant and a member of the Australian Institute of Geoscientists.

SGS Geosol conducted metallurgical leaching tests, which showed TREO recoveries of up to 81.7% and MREO recoveries above 60%, indicating technical and economic feasibility for mining. Samples were analyzed and certified by ALS Brasil and SGS Geosol laboratories.

Rivadávia told Valor that the project began as an iron mining venture in 2020, but during studies a hydrothermal alteration—a volcanic fissure—was identified, suggesting the presence of rare earths. The company then decided to focus on further exploration.

Research began in 2022. The first discovery was at the Caconde target, in the municipality of the same name, and the second was made now. “At Alvo Caconde, we identified a potential of 100 million tonnes of rare earths at 3,200 ppm. That alone could supply a plant for 20 years with output of 5 million tonnes per year. With Botelhos, the expectation is at least 500 million tonnes,” Rivadávia said.

An initial economic assessment at Alvo Botelhos indicated extraction potential of at least 500 million tonnes of rare earths. Drilling began last week.

Rivadávia said he is in talks with groups from the European Union, Canada, the United States and China to raise funding for the project, though the names of the groups remain confidential at this stage.

For the first phase, covering exploration and certification of the areas, Cabo Verde Mineração is investing about $10 million of its own funds.

The company is seeking financing to build the industrial complex, which is expected to require $370 million for a plant with capacity to process 5 million tonnes per year.

The initial plan is to install the plant in Cabo Verde, Minas Gerais, where the company already holds licenses to extract and process iron ore.

In parallel with the rare earth project, Cabo Verde Mineração resumed in December 2025 its iron ore mining project at the Catumbi Mine, located in Cabo Verde and Muzambinho, southern Minas Gerais. The project had been halted for two years while the company focused on rare earth exploration.

“The iron ore reserve is small, close to one million tonnes. We have a license to extract 600,000 tonnes per year. I estimate it will be a project lasting about two and a half years,” Rivadávia said. The company plans to produce lump ore and sinter feed with an average iron content of 66%, aimed at the domestic market.

The rare earth project, however, is expected to take six to seven years to complete the industrial complex and obtain all licenses and certifications needed for production, according to the executive.

Rare earth mining differs from other types of extraction. The company uses ammonium sulfate, which exchanges ions with the clay to separate the rare earth elements. The clay is then returned to the environment enriched with ammonia, a type of fertilizer.