Rare‑earth and inverter pushback

Brazil is tightening access to its rare earths, and the European Union is moving to withhold clean-energy funding from projects that use Chinese inverters. (scmp.com 1) (scmp.com 2) A Brazilian industry ministry official said this week that foreign partners will have to process rare earth minerals inside Brazil, not just ship out ore or concentrate. Reuters separately reported on April 14 that Brasília expects a national critical-minerals policy within two to three months. (scmp.com) (mining.com) That push comes as the United States International Development Finance Corporation signed a $565 million financing package for Serra Verde in Goiás, the only operating rare-earth mine in Brazil. The company said in February that the money will expand production at its Pela Ema project, which entered commercial production in early 2024. (dfc.gov) (serraverde.com 1) (serraverde.com 2) Rare earths are a group of 17 metals used in permanent magnets, the high-strength components inside electric-vehicle motors, wind turbines, data centers and defense systems. The International Energy Agency said China accounted for 91 percent of global rare-earth refining in 2024, even though it mined about 60 percent of magnet rare earths. (iea.org 1) (iea.org 2) Brazil has the world’s second-largest rare-earth reserves, and a senior official said the country holds about 10 percent of global critical-mineral reserves overall, including large deposits of graphite and nickel. President Luiz Inácio Lula da Silva has repeatedly said Brazil should stop acting only as a commodities exporter and build local industry instead. (scmp.com) (mining.com) (bloomberg.com) In Europe, the target is different hardware. Inverters are the electronic controls that turn power from solar panels and wind equipment into electricity that can be fed into the grid, and South China Morning Post reported that Brussels plans to stop European Union funds from supporting projects that use Chinese-made versions. (scmp.com) The report said European Commission President Ursula von der Leyen approved the plan in March, and that Chinese suppliers led by Huawei control more than 220 gigawatts of Europe’s installed solar capacity through inverters. The Commission has not publicly announced the measure. (scmp.com) Brussels has already been using funding and trade tools to steer clean-energy supply chains. On March 10, the Commission adopted a Clean Energy Investment Strategy built around public de-risking and private capital, and in April 2024 it opened Foreign Subsidies Regulation investigations into Chinese-linked bidders in a Romanian solar project partly financed by the European Union Modernisation Fund. (ec.europa.eu) (ec.europa.eu) The European Solar Charter, signed on April 15, 2024, also framed the issue as one of industrial dependence, saying most European demand for solar modules was being met by imports from a single supplier, China. The Commission said the European Union installed 56 gigawatts of solar in 2023 and linked faster deployment to its 2030 renewable-energy target of at least 42.5 percent. (ec.europa.eu) Brazil and Europe are pushing at different choke points in the same supply chain: Brazil wants more of the processing step kept at home, while Europe is trying to shape which foreign equipment can still qualify for public support. In both cases, governments are using market access and subsidies, not import bans, to change who captures the value around strategic energy hardware. (scmp.com) (scmp.com) (ec.europa.eu)