Brazil pushes to process rare earths
Brazil is demanding that rare earth minerals be processed domestically instead of being exported as raw ore. The demand is part of a broader trend of countries trying to capture higher‑value stages of critical‑mineral supply chains amid U.S.–China competition. (scmp.com)
Brazil will require foreign partners to process rare earth minerals inside Brazil if they want access to the country’s deposits, a senior official said this week. (scmp.com) The push comes as Brazil tries to keep more of the value chain at home instead of shipping material abroad for refining. The South China Morning Post reported the policy shift on April 15, citing a senior government official. (scmp.com) Rare earths are a group of minerals used in permanent magnets that go into electric vehicle motors, wind turbines, electronics and some defense systems. Processing them is the step that turns mined material into higher-value chemical products manufacturers can actually use. (serraverde.com) Brazil has one operating rare earth mine, Serra Verde’s Pela Ema project in Minaçu, Goiás state. Serra Verde said it began commercial production in January 2024 and expects Phase I to produce at least 5,000 tonnes a year of rare earth oxide, rising to 6,500 tonnes a year by the end of 2027. (serraverde.com; serraverde.com) The dispute is about who captures the profitable middle of the business: separating and refining ore into usable material. Brazil’s Mines and Energy Ministry says its strategic-minerals policy aims to strengthen national production and processing and reduce external dependence. (gov.br) President Luiz Inácio Lula da Silva’s government has been pushing a broader industrial policy since January 2024, with incentives for local production and “local content.” That policy was presented as part of a plan to reverse deindustrialization and attract private investment into domestic industry. (gov.br) The international pressure is rising because Brazil is one of the few countries seen as able to loosen China’s grip on rare earth supply chains. Bloomberg reported in March that Serra Verde is Brazil’s only active rare earth producer and that its mine and processing plant started commercial-scale production in 2024. (bloomberg.com) Washington has also put money behind that strategy. A U.S. International Development Finance Corporation project document shows up to $465 million in debt financing for Serra Verde, with total project costs of $628 million. (dfc.gov) Brazil is also discussing a bigger state role. Bloomberg reported on April 10 that Brazilian lawmakers proposed creating a state-run company, Terras Raras Brasileiras SA, to work on rare earths and other critical minerals. (bloomberg.com) The immediate question is whether Brazil can build enough domestic refining capacity to match its mining ambitions. Until that happens, the country is trying to turn access to its ore into leverage over where the next processing plants get built. (scmp.com; gov.br)
