Brazil's Rare Earth Gamble: Promise Meets Political Hurdles

Highlights

• Brazil holds 22 million tonnes of rare earth reserves, second only to China.
• The Serra Verde mine in Brazil is set to enter production in 2024.
• Currently, Brazilian rare earth production accounts for less than 2% of global production.
• Significant infrastructure and processing development is required in Brazil.
• U.S. policymakers view Brazil as a potential strategic partner for critical minerals.
• The Brazilian National Development Bank (BNDES) has pledged approximately $1 billion for critical mineral projects.

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A piece from Tulane University (opens in a new tab) accurately highlights the fundamentals of the rare earth global realities: China produces ~69% of the global rare earth elements, processes around 90%, and controls nearly the entire heavy rare earth chain. Those figures align with USGS and IEA estimates. It’s also true that Brazil holds enviable reserves of 22 million tonnes of REEs, placing it second only to China. Serra Verde—the first commercial-scale Brazilian REE mine—did indeed enter production in 2024 after a long permitting slog, underscoring the reality of bureaucratic delays.

Running Ahead of Reality?

Framing Brazil as the “clear disruptor” to China’s dominance overstates the present. Yes, reserves are vast, but current production remains under 2% of global output. Moving from ore to magnets requires not just mining but separation plants, solvent extraction know-how, and customer-qualified oxide and alloy facilities—none of which Brazil has yet at an industrial scale. The article projects leadership while glossing over those engineering and commercial gaps.

Subtle Tilt in the Telling

The authors—both former U.S. diplomats—naturally frame Brazil’s rise through a Washington lens, emphasizing partnership potential with the United States and Europe. While valid, this carries a policy-driven bias: it underplays the likelihood of Brazil forging China-linked ventures if U.S. tariffs remain in place. It also paints Brazilian operations as inherently more environmentally sound than China’s, a claim that may prove aspirational given Brazil’s track record on mining oversight in sensitive biomes.

What Matters for the Supply Chain

What’s notable here is less the cheerleading than the signal: Brazil is on the radar of U.S. policymakers as a strategic REE partner, akin to Australia a decade ago. With the Brazil development bank BNDES pledging ~$1 billion for critical minerals and dozens of projects identified, Brazil could become the Western Hemisphere’s critical mineral anchor—if bureaucracy, infrastructure, and politics don’t choke momentum. Investors should watch for:

• How quickly Serra Verde ramps up throughput and downstream capacity.
• Whether foreign partners (U.S., EU, Japan) actually commit capital beyond MoUs.
• Resolution—or escalation—of U.S.–Brazil tariff tensions that could derail collaboration.

Bottom line: Brazil has the geology and some financing momentum. The leap to “global disruptor” is still speculative. Execution—not reserves—will decide whether Brasília becomes a genuine counterweight to Beijing.

Citation: James B. Story & Ricardo Zúniga, Energy Security & Rare Earth Elements: Brazil’s Critical Leadership in Diversifying the Global Supply Chain, Sept. 2025.

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