Brazil is poised to become a significant rival to China in the strategically vital rare earths market amid rising global trade tensions and increasing demand for these crucial materials used in advanced technologies, according to Bloomberg Linea.

As the holder of the world’s second-largest rare earth reserves, estimated at around 21 million tonnes in 2024-second only to China’s 44 million tonnes-Brazil is well positioned to compete globally, based on US Geological Survey data cited by Statista. This advantage places Brazil in a favorable spot to secure supply chains for rare earth elements, which are essential for manufacturing smartphones, electric vehicles, renewable energy systems, and defense technologies.

Francisco Américo Cassano, a professor and consultant, emphasized that expanding Brazil’s role as a global raw materials supplier by including rare earths alongside its existing exports is vital for the country’s economy. He advocates for Brazil to enhance its position as a commodity supplier while importing higher value-added products.

The Serra Verde Group, a Brazilian mining company located in Goiás state, is leading the country’s efforts in this sector. It aims to produce 5,000 tonnes of rare earth oxide annually by 2026 and anticipates an 8.5% yearly increase in demand for its products through 2035.

This push into rare earths comes amid heightened US-China trade disputes, with the US recently investigating tariffs on critical minerals, including rare earths, which are deemed foundational to the defense industrial base. Currently, the US imports about 70% of its rare earths from China, which controls roughly 61% of global production, according to the International Energy Agency.

Market analyst Alexander Londoño from ActivTrades noted that Latin America is just beginning to tap into its rare earth potential. While initial investments are large, these materials are expected to be heavily utilized in the future. However, he cautioned that successful resource development depends on supportive government policies and careful environmental management due to concerns about ecosystem disruption from mining.

The strategic importance of rare earths is also reflected in their rising price forecasts. Financial analyst Gregorio Gandini told Bloomberg that prices are expected to increase significantly, with lanthanum oxide-a material used in pharmaceuticals and optical glass-potentially doubling from around $550 per tonne today to $1,100 per tonne by 2030.

International investment is already flowing into Brazil’s rare earth sector. For instance, Saudi Arabia’s Ma’aden mining company announced plans to invest about BRL 8 billion (approximately $1.41 billion) in Brazilian mineral exploration. The Brazilian government is also seeking partnerships with Middle Eastern countries to enhance the processing of strategic minerals, including rare earths.

Despite these developments, Cassano expressed concern that Brazil is not fully leveraging its rare earth resources for domestic technological advancement. He stressed the need for greater investment in training scientists to develop local knowledge and technologies, rather than exporting intellectual talent abroad.

Beyond rare earths, Brazil is a key regional producer of other strategic minerals such as cobalt, lithium, manganese, and silicon, which are critical for emerging technologies like energy storage and electric mobility.

Rare earth deposits in Brazil are widely distributed across several states. Minas Gerais hosts deposits of monazite and niobium, Bahia’s Caetité area is known for yttrium and neodymium, Amazonas’ Seis Lagos Province has high potential despite environmental challenges, and Goiás and Pará also contain promising alkaline rock deposits.

The economic benefits of rare earths are significant due to their high market prices compared to traditional Brazilian exports. For example, neodymium oxide trades at around $75,000 per tonne, vastly exceeding the $120 per tonne price for conventional iron ore.

As global demand for rare earths grows with technological progress and the energy transition, Brazil’s abundant resources could reshape global supply chains and boost its economic influence internationally.

Additionally, Lynas Rare Earths, the largest rare earths producer outside China, headquartered in Malaysia, is exploring acquisitions in Brazil as part of its expansion strategy, according to CEO Amanda Lacaze.

In summary, Brazil’s vast rare earth reserves and strategic initiatives position it as a rising competitor to China in this critical market, with the potential to alter global supply dynamics amid increasing geopolitical and economic pressures.

 

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