Brazil Emerges as Key Player in US-China Rare Earth Minerals Rivalry
Brazil’s vast rare earth reserves position it as a crucial player in the US-China minerals competition, with US efforts to diversify supplies intensifying and Brazil facing challenges in value addition.
- • Brazil has the second largest reserve of rare earth minerals globally, crucial for high-tech industries.
- • China currently controls 60% of extraction and nearly 90% of refining of rare earths, using it as geopolitical leverage.
- • The US is pursuing 'friendshoring' to diversify rare earth supply, viewing Brazil as a key ally due to its reserves and political stability.
- • Brazil’s easy-to-process ionic clay deposits offer cost and environmental advantages, but it risks exporting only raw materials without developing refining capacity.
Key details
Brazil holds the world's second largest reserve of rare earth minerals, positioning it strategically amid the intensifying technological and energy competition between the US and China. These 17 rare earth elements are vital for manufacturing electric vehicles, wind turbines, smartphones, and guided missiles, with demand expected to increase sevenfold by 2040. Currently, China dominates the sector, controlling about 60% of extraction and nearly 90% of refining, using this grip as a geopolitical leverage. In response, the United States is actively seeking to diversify its supply by partnering with trusted democratic allies—a strategy known as 'friendshoring.' Brazil, with its vast, easily processed reserves particularly found in Minas Gerais’ ionic clays, stands out as a natural candidate for this role due to lower extraction costs and political stability. However, experts caution that Brazil risks merely exporting raw materials without building its own refining capacity, which would limit economic benefits. Without a clear industrial policy, Brazil could repeat past mistakes of losing value addition to foreign processors. Meanwhile, discussions between US and Brazilian leaders continue to address trade barriers, with recent US Senate approval of reducing tariffs on Brazilian imports still pending final Congressional and presidential approvals, signalling ongoing efforts to enhance economic ties. This emerging dynamic places Brazil at the crossroads of a crucial global supply chain shift, balancing opportunity with the need for strategic development to fully capitalize on its resources, according to Gazeta do Povo and Reuters reports.
This article was synthesized and translated from native language sources to provide English-speaking readers with local perspectives.
