Interest in Brazil’s rare earth reserves, located mainly in the states of Minas Gerais, Goiás, Amazonas, Bahia and Sergipe, stems from the fact that they are the largest outside China. They could help reduce Western dependence on Chinese rare earths, as China accounts for 69% of global production and 91% of refining.

The group comprises 17 metals, including lanthanum, samarium, terbium and lutetium. While abundant worldwide, they involve costly and complex extraction and refining processes.

Regulatory uncertainty

Among the pre-operational initiatives are projects led by mining companies listed on foreign exchanges as well as privately held and publicly traded Brazilian companies, most of them concentrated in Minas Gerais.

Specialists interviewed by Valor said, however, that turning projected investments into actual capital inflows will depend on regulatory and financial advances.

Projects by Viridis Mining & Minerals and Meteoric Resources, both listed on the Sydney Stock Exchange in Australia, Aclara Resources, listed in Toronto, Canada, and Atlas Critical Minerals, listed on the Nasdaq in the U.S., are expected to begin operations in 2028.

“Following the schedule, we estimate reaching the final investment decision in the second half of this year,” said Klaus Petersen, Viridis’s country manager in Brazil.

Meteoric plans to begin construction in the third quarter, if it secures an installation license. “Construction will take 24 months, which could be reduced to 18,” said Marcelo Carvalho, the company’s chief executive.

Aclara noted that the multiplicity of agencies involved in environmental licensing and the lack of domestic customers to purchase future mine output pose challenges to securing financing. “Establishing offtake contracts [advance purchase agreements for production] is a key factor for obtaining financing,” said José Augusto Palma, the miner’s executive vice president.

Marc Fogassa, CEO of Atlas, said the company’s areas are currently “in the stage of geological studies, laboratory testing and definition of processing routes.”

Projects by St. George Mining, also listed in Sydney, and privately held Brazilian company Terra Brasil are expected to begin operations in 2029.

“Studies are under way to confirm the project’s technical and economic potential,” said St. George executive chairman, John Prineas. The project also foresees additional investments in niobium.

Both initiatives are located in Araxá, a city in Minas Gerais where Companhia Brasileira de Metalurgia e Mineração (CBMM), controlled by the Moreira Salles family, operates.

Terra Brasil’s initiative also targets investments in fertilizers. “We have adopted a differentiated strategy, with an integrated project combining rare earths with phosphate and potash fertilizers,” said Eduardo Duarte, the company’s chief executive.

Brazilian Critical Minerals (BCM) did not disclose when it expects to start operations, but chief executive Andrew Reid said the main steps to be completed this year include obtaining “all necessary licenses.”

The investment volume in the segment is likely to be higher, since the projects compiled by Valor represent only part of those in the pre-operational stage, and others have yet to disclose public estimates of capital expenditures.

“This investment forecast is an excellent indication that the world is looking at the country,” said Patricia Seoane, mining and steel leader at PwC Brasil. She noted, however, that uncertainty over the regulatory framework for rare earths and other critical minerals, a policy Brazil still lacks, creates insecurity for investors, banks and lenders.

Financing gap

GIN Capital estimates that at most 35% of the R$13 billion projected will actually be raised and disbursed by 2028. “The most technically advanced projects, with more robust feasibility studies and some engagement with potential offtakers, have a 60% to 70% probability of reaching a final investment decision,” said Roberta Dalla, co-founder and partner at the platform. The others face lower odds absent structural changes in the business environment.

A bill under consideration in the Lower House, under the rapporteurship of lawmaker Arnaldo Jardim, of the Citizenship Party, is seen as the most advanced proposal to establish a National Policy for Critical and Strategic Minerals and boost the segment.

Companies across the critical minerals chain are advocating for the inclusion of a guarantee fund in the framework to unlock capital flows. The Critical Minerals Association (AMC) said the proposal would bring together development banks and the private sector to dilute financing risks and allow junior mining companies, which lead many initiatives and lack active production to offer as collateral, to access funding under more competitive terms.

“We need another guarantee mechanism so that the entire package of projects can be covered,” said Marisa Cesar, chair of the association’s board.

Lawmaker Arnaldo Jardim confirmed to Valor that the draft under his report includes such an instrument.

The Brazilian Mining Institute (Ibram) said the high risk of mineral exploration, where roughly two out of every 100 surveyed areas become viable projects, limits access to credit. As a result, said Julio Nery, the institute’s mining affairs director, junior companies seek capital on exchanges in countries such as Australia and Canada.

“They are not necessarily Australian or Canadian projects. They may even be Brazilian, but they seek risk capital abroad because there are financial incentives there that do not exist here.”

The AMC also pointed to “legal uncertainty” generated by interventions from bodies such as the Federal Prosecutor’s Office (MPF) in environmental licensing. AMC’s Cesar cited cases involving Viridis and Meteoric, which faced legal action before receiving preliminary licenses last year. “This affects the attraction of more investors.”

The MPF said that, “as a precaution,” potential environmental risks should be assessed through complementary studies.

Shigueo Watanabe Junior, a researcher at the ClimaInfo Institute, said the agency acts because environmental protection tools and safeguards for communities affected by projects have failed in Brazil. “In an ideal world, the Public Prosecutor’s Office would not need to intervene, because licensing and monitoring mechanisms would be sufficient.”

The lack of structured long-term offtake contracts, still faced by some projects, and the technical complexity of refining the elements were also cited by GIN as obstacles.

“Without long-term offtake agreements with end manufacturers or intermediaries, these projects cannot secure traditional project finance,” GIN’s Dalla said, referring to a model in which credit is granted primarily based on future cash-flow generation capacity.

Global race

In the global race to reduce dependence on China, she said Brazil could capture 15% to 20% of the global rare earth market, projected at up to $12 billion annually by 2030, but “the window is 18 to 24 months.”

If Brazil misses the opportunity, the risk is that refining infrastructure and offtake agreements will already have been established in other countries. “And it will be exponentially more difficult and more expensive to attract large-scale capital,” she said.

Currently, the only commercially operating mine in the country is Serra Verde Mineração in Goiás, which announced it secured $565 million in financing from the U.S. International Development Finance Corporation (DFC), the U.S. development bank.

The search for international investors, including development institutions and public and private banks, is a strategy already used by pre-operational mining companies.

In September 2025, Aclara announced it had received a commitment of up to $5 million from the DFC to fund a feasibility study. Viridis and Meteoric have also announced letters of support and interest in financing from export credit agencies in countries including Australia, Canada, France and the United States.

Domestically, Brazil also has initiatives aimed at unlocking investments in critical minerals. The federal government has been working to attract international investors to the segment.

In November, the Brazilian Trade and Investment Promotion Agency (ApexBrasil) held meetings in the European Union, and in March this year expects at least five mining companies to receive announcements of investments linked to the bloc.