Rare Earths: Lula Throws Down the Gauntlet to Trump as Brazil Eyes a Bigger Role in Global Supply Chain-Substance or Talk

Highlights

• Brazil holds 21 million tons of rare earth reserves, second only to China, yet remains a minor producer due to limited domestic refining infrastructure.
• President Lula announced a new council for rare earth technological development, aiming to export value-added products rather than raw minerals.
• Serra Verde, Brazil's only commercial rare earth mine, has relied on Chinese processing facilities, underscoring the country's refining gap.
• Analysts estimate China controls roughly 90% of global rare earth processing capacity, a dominance Brazil must overcome to realize Lula's ambitions.
• Building a competitive rare earth industry will require billions in investment, environmental licensing, specialized technology, and years of industrial development.

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Brazilian President Luiz Inácio Lula da Silva has reiterated that the country intends to become a much bigger player in the global rare earths industry, using pointed remarks aimed at U.S. President Donald Trump to underline Brazil's ambitions.

Speaking after a high-level meeting at the Planalto Palace on July 10, the controversial leftist-leaning head of Brazil declared that if Trump is concerned about China's dominance of rare earth minerals, "he can start worrying about Brazil too." The comments were widely interpreted as both a geopolitical message and a declaration that Brazil wants to move beyond simply exporting raw minerals to becoming a producer of high-value rare earth products.

Building a Strategic Industry

Lula announced the creation of a new council dedicated to the technological development of rare earths and other critical minerals, part of a broader strategy to strengthen Brazil's position in industries considered vital to the global energy transition and advanced manufacturing. The initiative comes as countries around the world seek to reduce dependence on China, which dominates the processing and refining of rare earth elements used in electric vehicles, wind turbines, smartphones, defense systems, semiconductors, and other high-tech products. Rather than remaining a supplier of raw materials, Lula said Brazil's goal is to export "intelligence and knowledge," emphasizing that value-added production should take place within the country.

A Candid Admission

The most surprising part of Lula's speech was his frank admission that he had little knowledge of the rare earth sector before meeting with government officials, scientists, and mining specialists. He told attendees he initially believed Brazil was "almost illiterate" on the subject before hearing presentations from experts. Lula also joked that he still does not fully understand "those famous rare earths." The unusually candid remarks highlighted both Brazil's enormous geological potential and the reality that the country is only beginning to develop a comprehensive strategy for the sector.

Brazil's Enormous Resource Base

According to the U.S. Geological Survey (USGS), Brazil possesses approximately 21 million tons of rare earth reserves, making it the world's second-largest holder after China, which has an estimated 44 million tons. The United States, by comparison, holds roughly 1.9 million tons.

Rare earth elements consist of 17 metallic elements that are essential for modern technologies. Although abundant in the Earth's crust, they are rarely found in concentrations that make mining and processing economically viable. Brazil's reserves are primarily located in states including Goiás, Minas Gerais, Bahia, and Amazonas, with additional exploration continuing across the country.

Production Still Lags Behind

Despite its vast reserves, Brazil remains a small producer of rare earth minerals. The country's biggest challenge is not mining but refining. Separating rare earth elements into materials suitable for industrial use requires complex chemical processing, an area where China currently dominates the global market. Analysts estimate China controls around 90% of the world's rare earth processing capacity, giving Beijing significant leverage over global supply chains. Brazil currently has very limited domestic refining capability, meaning much of the value generated from its mineral resources is created elsewhere.

Serra Verde Highlights the Challenge

Brazil's only commercial rare earth mine, Serra Verde, located in Goiás state, illustrates both the country's potential and its limitations. The project is the only producing ionic clay rare earth operation in the Western Hemisphere, but its concentrate has been processed through facilities in China due to the lack of large-scale refining infrastructure in Brazil. That has changed with American investment, but REEx has reported on the ground some technical challenges with the production.

And for Lula's vision of exporting technology rather than raw materials to become reality, major investment will be needed in separation plants, chemical processing facilities, and downstream manufacturing.

Growing Global Competition

Rare earth minerals have become increasingly important as governments seek secure supplies for clean energy technologies, artificial intelligence, aerospace, and defense industries. The United States, the European Union, Japan, and several other countries have launched initiatives to diversify supply chains and reduce dependence on Chinese processing. Brazil's vast reserves have consequently attracted growing international interest from mining companies and governments looking for alternative sources. However, building a competitive rare earth industry requires more than mineral deposits. It demands billions of dollars in investment, environmental licensing, specialized technology, skilled labor, and years of industrial development.

Political and Economic Significance

Lula's comments also reflect a broader debate within Brazil over how the country's natural resources should be developed.

His administration has repeatedly argued that Brazil should capture more value from its mineral wealth by encouraging domestic processing and manufacturing instead of exporting unprocessed commodities. The strategy mirrors policies being adopted by several resource-rich nations seeking to develop complete industrial supply chains rather than remaining exporters of raw materials. Whether Brazil can achieve that ambition will depend on its ability to attract investment, develop refining technology, and establish competitive downstream industries.

Looking Ahead

Brazil unquestionably possesses one of the world's richest rare earth resource bases, giving it a potentially strategic role in future global supply chains.

Yet turning geological wealth into industrial leadership remains a far more complex challenge. Lula's remarks have brought renewed attention to Brazil's potential, but the country's success in this emerging Great Powers Era 2.0 will depend on building the processing capacity, technology, and industrial ecosystem needed to compete with the well-established dominance of China in the rare earth market.

Source: “Lula Tells Trump to ‘Worry’ About Brazil’s Rare Earths,” The Rio Times July 11, 2026.