Brazil Implements Plan To Become A Key Rare Earth Elements Supplier

Brazil wants to diminish its dependence on China when it comes to rare earth elements (REE).

As numerous countries rush to strengthen their REE supply chains, the South American country presents itself as a perfect provider of metals essential for advanced technologies and the green energy transition.

Brazil, holding the world's third-largest REE reserves, has significantly advanced in this sector. The launch of commercial production at the Serra Verde mine in Goiás is a major milestone. This mine, one of the largest ionic clay rare earth deposits globally, targets an initial annual output of 5,000 tons of rare earth oxides.

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These oxides are vital for manufacturing high-efficiency magnets in wind turbines and electric vehicles. Potential output could double by 2030. Serra Verde is the first large-scale operation outside Asia to produce all four critical REEs essential to manufacturing permanent magnets.

"Brazil as a source of potential rare earths is a very exciting proposition because there have been some very meaningful discoveries made in the past couple of years," Daniel Morgan of Barrenjoey Investment Bank stated for Reuters.

Despite its potential, Brazil’s rare earth industry is currently dormant. It produces only a fraction of what it could contribute to the global market. Various challenges, such as environmental concerns and a slow permitting process, contribute to this issue. For example, the aforementioned Serra Verde operation took 15 years to develop.

Furthermore, a recent 70% decline in rare earth prices, accompanied by rising interest rates, has made it challenging for smaller companies to secure funding. These external economic pressures have stalled many projects and deterred potential investors.

Still, positive momentum is building, highlighted by the recent surge in mineral research requests, particularly in Goiás. Companies like Appia Rare Earths APAAF, Aclara Resources ARAAF, and Brazilian Rare Earths are exploring ionic clay deposits in the region. These deposits share geological similarities with Chinese deposits, a rarity outside of China.

Accompanied by low labor costs, access to hydropower for clean energy, and $194 million in government support for strategic mineral projects, Brazil is on the way to stake its claim in a rapidly developing sector.

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Image by Khusen Rustamov from Pixabay