Highlights

• Manuel Mindreau's study warns that Brazil's rare earth reserves are strategically meaningless without sustained industrial policy pushing beyond mining into processing, refining, and value-added manufacturing—where China's monopoly is most consequential.
• Policy discontinuity across three Brazilian government periods (2010-2025) repeatedly pulled the country back toward commodity exports, failing to build the midstream processing capacity that creates strategic leverage.
• For Western supply chains, Brazil could become a meaningful diversification partner only through value-chain integration—joint ventures, technology transfer, and long-term offtakes—not merely raw material access.

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Manuel Mindreau, a PhD researcher at the International Institute of Social Studies (ISS) supported by the European Research Council, argues in The Extractive Industries and Society (Elsevier, Dec. 2025) that Brazil’s rare earth opportunity will not translate into strategic leverage—or meaningful relief for Western supply chains—unless Brazil sustains an industrial policy that pushes beyond mining into processing, technology, and value-added manufacturing.

In “The relaunching of industrial policy in Brazil: What have rare earths got to do with it?” Mindreau traces Brazil’s stop-and-start efforts from 2010–2025 and concludes that policy discontinuity and weak governance repeatedly pulled Brazil back toward a traditional commodity-export path, while the global rare earth “choke point” remains downstream—separation, refining, metals, and magnets—where China’s dominance is most consequential.

Why this matters to REEx readers

Rare earths are not just “rocks in the ground.” They are industrial inputs that only become strategically meaningful after they are processed into separated oxides, metals, and permanent magnets used in EV drivetrains, wind turbines, robotics, consumer electronics, and defense systems. Mindreau’s paper is a plain-language warning for investors and policymakers: reserves alone do not create strategic advantage. Without an industrial policy that keeps value-chain investment “sticky” across political cycles, Brazil risks repeating a familiar pattern—exporting raw or semi-processed material while others capture the high-margin steps.

Study approach and methods

Mindreau uses a comparative political economy and policy analysis across three Brazilian periods (2010–2025):

• Rousseff-era industrial policy (including Plano Brasil Maior and rare earth initiatives that were incorporated later in that cycle)
• Temer/Bolsonaro period, characterized by weakened or absent industrial policy continuity
• Lula III’s “mission-driven” program, Nova Indústria Brasil (announced January 2024), where energy transition, digital transformation, and defense-linked missions could increase demand for rare earths and other critical minerals

The study is built from policy documents, program histories, institutional sequencing, and secondary literature, emphasizing how state capacity, governance structure, and cross-ministry alignment determine whether rare earths become a platform for industrial upgrading—or remain a raw-material export story.

Key findings in plain English

Mindreau’s conclusions align with REEx’s long-running thesis about rare earths as industrial policy, not geology:

• Brazil has been slow to integrate rare earths into the national policy agenda. Compared with China’s decades-long strategic management, Brazil’s engagement is described as patchy and reactive.
• Brazil’s scientific community played an outsized role. A critical catalyst came from academia—the 2010 “Letter of Aracaju”—which helped prompt federal attention and interministerial action.
• Brazil still lacks a coherent national strategy for critical minerals. The paper repeatedly points to governance gaps and weak coordination across ministries that would need to align mining, processing, technology, and industrial demand.
• Industrial policy creates the conditions for strategic management. When industrial policy frameworks were present, rare earth planning advanced further through roadmaps, studies, and institutional coordination. When industrial policy vanished, commodity-export logic reasserted itself.
• Policy continuity is the Achilles’ heel. Rare earth processing and magnet ecosystems take many years to build. Brazil’s political and institutional resets repeatedly cut momentum before value-chain investments could mature.

The China processing monopoly—why Brazil mirrors the West

The paper reinforces a point increasingly understood in Washington and Brussels: rare earth independence is won in the processing plant, not the pit.

Separation and refining are capital-intensive, hard to permit, environmentally sensitive, and commercially risky—especially when incumbents can undercut prices and control market access. Without industrial policy tools—financing, offtakes, procurement, coordinated planning, and sustained incentives—private capital often avoids building midstream processing capacity at scale.

Implications for the U.S., Europe, and allied supply chains

Mindreau’s Brazil case suggests Brazil could become a meaningful diversification partner—but only if three bottlenecks are addressed:

1. Processing build-out: separation, oxides, metals, and eventually magnet materials—where the strategic bottleneck sits
2. Stable governance: a national critical minerals policy and credible institutions that outlast election cycles
3. Demand anchoring: domestic or allied industrial pull (motors, turbines, defense, digital infrastructure) that makes downstream investment bankable

For U.S. and allied stakeholders, the message is pragmatic: partnerships should aim at value-chain integration, not merely supply access—joint ventures, technology transfer, long-term offtakes, and co-financing that help Brazil avoid becoming “a new ore spigot feeding the old processing monopoly.”

Limitations and controversies to watch

Qualitative design

This is policy and institutional analysis, not a quantitative market forecast; it does not model price dynamics or project-level financials.

Policy implementation risk

The paper highlights how “fast-track” licensing and extractive-first approaches can trigger social, environmental, and legal backlash—delaying projects and raising ESG risk.

Strategic ambiguity

Even with mission-driven industrial policy, competing priorities and weak institutional coordination can still lead to rare earths being mentioned but not truly operationalized in national plans.

China’s pricing power remains a structural headwind

The paper implicitly raises the central tension for any newcomer: can Brazil (or the West) build processing without sustained policy protection against predatory pricing and market flooding?

REEx take

Mindreau’s paper delivers a clear warning: Brazil’s rare earth reserves are not a strategy. Strategy is policy continuity, processing capacity, and anchored industrial demand that rewards value-added production. For the West, Brazil remains a promising diversification node—but only if Brazil resists the commodity-export treadmill and builds the midstream that turns geology into strategic leverage.

Citation: Mindreau, M. (2025). The relaunching of industrial policy in Brazil: What have rare earths got to do with it (opens in a new tab)? The Extractive Industries and Society, 24 (Dec 2025), 101723.

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