Mining giant Brazil has ambitious plans to build a rare earths industry as Western economies push to secure the metals needed for magnets used in green energy and defense, and break China’s grip on the supply chain.
Brazil holds the world’s third-largest rare earth reserves, and its first rare earths mine, Serre Verde, started commercial production this year. Analysts, mining CEOs, and investors expect the country’s rare earths output to grow, supported by Western government incentives that are also accelerating a global rare earths refining and processing industry.
Brazil’s low labor costs, clean energy, established regulations, and proximity to end markets, including Latin America’s first magnet plant, provide advantages in its quest to become one of the world’s top five rare earths producers. However, low rare earths prices, technical challenges, and nervous lenders pose obstacles to the Latin American nation’s ambitions.
The pace at which Brazil’s rare earths projects come together will be a test for how successful the West may be at building a new advanced industry almost from scratch to break China’s dominance. The U.S. and its allies, who are almost entirely dependent on China for rare earths metals and magnets, have set out to build a separate supply chain by 2027 after deliveries were disrupted during the COVID-19 pandemic.