Brazil is seeing a new era for its mineral wealth. This time, not for gold, coffee or rubber, but for the gold of the age of artificial intelligence and renewable energy: rare earth metals. “The next big rare earth projects will be in Brazil,” says geologist Andrew Tunks, chief executive of Australian mining company Meteoric Resources. “I don’t know how long it will take, but at some point Brazil will compete with China,” he tells DW.
Meteoric is investing heavily in rare earth metals exploitation in Brazil. The so-called “Calderia” project in the Brazilian state of Minas Gerais aims to develop the world’s largest ionic clay deposit there. Ionic clays are one of the most important sources of “medium” and “heavy” rare earth metals (e.g. dysprosium, terbium), which are particularly important for high-performance magnets in wind turbines and electric mobility.
REQUESTS FOR CONCESSIONS
Demand for rare earth metals has doubled since 2015 and could grow by at least another 30 percent by 2030, according to the International Energy Agency. These elements – particularly neodymium, praseodymium, dysprosium and terbium – are also used in the production of electric vehicles, data centers for artificial intelligence and in robotics.
After China, Brazil has the largest reserves of rare earth metals in the world. Reserves are estimated at around 21 million tons. China is in first place with 44 million tons. Growing global demand for rare earth metals has led to a significant increase in applications for concessions submitted to Brazil’s mining authority ANM. There are currently 2758 projects. In comparison, between 1975 and 2020, just over 250 applications for the exploitation of rare earth metals were submitted in Brazil. Between 2023 and 2024, there were 1662.
BILLIONS FOR PURCHASES IN BRAZIL
The new “gold rush” in Brazil can also be seen in the stock market. Share prices of companies investing in the exploitation of rare earth metals in that country have risen sharply. Meteoric (Australia), Resouro Strategic Metals (Canada), Appia Rare Earths and Uranium Corp (Canada) and USA Rare Earths (USA) have increased between 65 and 122 percent over the past twelve months.
In April, USA Rare Earths acquired the only active rare earth mine in Brazil from Brazilian mining company Serra Verde in Minaçu, Goiás state. Price: $2.8 billion. “The Serra Verde mine is the only mine outside of Asia that supplies all four magnetic rare earth metals on a large scale,” CEO Barbara Humpton said after the purchase. The mine’s importance is confirmed by the fifteen-year purchase agreement with various U.S. government agencies.
The participation of German companies in the exploitation of raw materials in Brazil, according to data from the German-Brazilian Chamber of Industry and Commerce in São Paulo, is currently “selective.” But Germany also wants to expand partnerships with Brazil in the areas of critical minerals, energy transition, green industry and supply chain security, Bruno Vath Zarpellon, head of business development at the chamber of foreign trade, said in a statement to DW.
REAL MONEY IS IN THE PROCESSING
Serra Verde is an exception in the Brazilian situation. Unlike China, Brazil has so far been limited mainly to the export of raw materials, without their further processing and refining. But this is precisely where the main source of profit lies and where China still dominates global supply. In China, the share of processing, according to data from the International Energy Agency, today exceeds 90 percent. In the production of permanent magnets, China has a monopoly position with a share of 95 percent.
This is where the electronics industry felt the pinch last year. Chinese export restrictions on rare earth metals, imposed after a tariff dispute with US President Trump, have cut off supplies.
That’s why Brazil, as well as other countries with large deposits of raw materials such as India, Vietnam, as well as Sweden and Norway, want to develop their own value chains. Meteorika’s CEO Tunks warns that this requires a long-term approach. “When it comes to ores, Brazil can become competitive relatively quickly,” says Tunks. “But when it comes to production, it will take longer.”
MUCH EASIER TO REACH THE PRODUCT
From a geological perspective, Brazil has an advantage over other countries with large reserves: according to data from the Brazilian Geological Institute SBG, almost 73 percent of the deposits are made up of ionic clay soils. “These are deposits where nature has already done some of the processing, that is, granitic rocks that have been altered or decomposed,” explains Francisco Valdir Silveira, head of the Brazilian Geological Institute SBG. “That is why ionic clay deposits are easier to exploit.”
Geologist and mining entrepreneur Andrew Tunks sees additional advantages to the exploitation and processing of rare earth metals in Brazil.
“Processing requires a lot of energy and water. Our mine in Brazil will be powered entirely by renewable sources and the electricity is cheap,” says Tunks. “We don’t have those conditions in Australia. It’s very dry there and the electricity is expensive.” Tunks hopes that the “gold rush” in Brazil will develop differently from the one in his homeland. “In Australia, we are extracting huge amounts of raw materials and just sending them to China. We are adding almost no value. I hope Brazil can do better.” (DW)