Brazil’s Rare Earth Strategy: 20 Million Tons of Clean Energy Metals That Could Reshape Global Supply Chains

Brasília, MMN Correspondent: Imagine a country sitting on 20 million tons of something the entire world is scrambling for. That’s Brazil right now, and the something is rare earth elements the metals that make electric vehicles move, wind turbines spin, and smartphones work. While China has dominated this market for decades, Brazil is quietly positioning itself as the next big player in the clean energy metals game.

Rare earth elements aren’t actually rare. They’re just tricky to extract and process. China currently handles about 70 percent of global production and nearly 90 percent of processing. That concentration has made everyone from Washington to Brussels nervous. They want alternatives. Brazil, with the world’s second largest reserves, offers a compelling answer.

What makes Brazil especially interesting is the type of rare earths it holds. Most of its deposits are in ionic clay formations, which are richer in heavy rare earth elements like dysprosium and terbium. These are the high value metals used in permanent magnets for EV motors and wind generators. And because ionic clays require less energy to process than hard rock deposits, Brazilian mines could be both cheaper and more sustainable.

The Brazilian government has noticed the opportunity. A new Critical Minerals Bill recently passed the lower house of Congress, creating a $380 million Guarantee Fund for Mineral Activity. The legislation gives priority status to strategic mining projects during environmental licensing and requires companies to invest in domestic research and development. A new Committee for Strategic and Critical Minerals will oversee which projects move forward, bringing together federal agencies, state governments, industry, and civil society.

President Luiz Inácio Lula da Silva has made it clear that Brazil is open for business from all sides. After a meeting with former U.S. President Donald Trump in May 2026, Lula said Brazil welcomes investment from both American and Chinese firms. This neutral stance allows Brazil to maintain strong ties with both superpowers while capitalizing on the global shift in mineral geopolitics.

The United States is already backing this effort. American mining company USA Rare Earths has partnered with Brazil’s Serra Verde Group to develop the Pela Ema mine in Minas Gerais. According to CEO Barbara Humpton, this is the only site outside Asia capable of supplying all four major rare earths lanthanum, cerium, neodymium, and praseodymium at scale. The U.S. Department of Energy and DARPA have provided financial and technical support, signaling Washington’s strategic interest in reducing reliance on Chinese supply chains.

Canadian company Aclara is conducting feasibility studies at the $680 million Carina mine, while Australian firms Meteoric Resources and Viridis Energy are advancing plans for additional ionic clay projects. These developments show growing Western confidence in Brazil’s potential as a reliable source of critical minerals.

Not everyone is celebrating. Environmental and Indigenous rights organizations have raised concerns about the legislation. Critics point out that the bill lacks explicit requirements for free, prior, and informed consent from Indigenous communities that could be affected by mining operations. The Articulation of Indigenous Peoples of Brazil warned that the legislation risks undermining ancestral territories without adequate safeguards. Adriana Pinheiro of Observatório do Clima noted that while the bill promotes domestic processing, it does not establish mandatory quotas unlike Indonesia and Malaysia, which have banned raw exports to force local refining.

Mônica Sodré, a senior fellow at the Brazilian Center for International Relations, acknowledges these concerns but emphasizes that Brazil’s existing environmental permitting framework is extensive and should be applied on a case by case basis. She cautions against allowing precautionary concerns to paralyze progress, noting that delays in mining development could lead to significant social and economic costs.

Brazil has another advantage that often goes unnoticed. About half of the country’s electricity comes from hydropower, giving it a substantial edge in low carbon mining and refining. This renewable energy base makes Brazil an attractive destination for companies looking to meet ESG standards and reduce the carbon footprint of their supply chains.

China remains Brazil’s largest trade partner, with bilateral imports tripling between 2024 and 2025. But the rise of Western investment suggests a strategic pivot. As the U.S. and Europe push for diversified supply chains, Brazil’s role could evolve from a mere exporter of raw materials to a key hub for value added processing and manufacturing.

With over 2,700 rare earths projects currently under consideration according to Brazil’s National Mining Agency, the country is poised for rapid expansion. Success will depend not only on policy execution but also on balancing economic growth with environmental stewardship and community inclusion.

Brazil’s ambition is not just to compete in the global rare earth market but to redefine it. By leveraging its geological advantages, renewable energy infrastructure, and strategic neutrality, Brazil aims to become a cornerstone of the clean energy economy. Whether it succeeds hinges on its ability to turn legislative promise into sustainable reality before the next wave of global demand hits.