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Brazil’s Rare Earth Reserves: A Potential Strategic Asset in the Global Supply Chain
- Harry Shlaudeman
- Jun 18
- 2 min read
The latest framework agreement between the United States and China to de-escalate their ongoing trade dispute brought into sharp relief the urgent need to diversify global supply chains for critical minerals.
By strategically leveraging its near-monopoly on rare earth production, processing, and refining, Beijing sent a clear message that it wields significant power to disrupt key industries across the globe through the targeted use of export controls and other measures. The episode serves as a stark reminder of the risks posed by concentrated supply chains and the pressing need to build more secure, scalable alternatives.
The U.S. and other Western economies are on notice that they must step up efforts identify and develop reliable, high-capacity sources of critical minerals capable of reducing strategic dependence on China and bolstering supply chain resilience.
Here is where Brazil enters the picture. With an estimated 21–23 million tons of rare earth reserves, Brazil holds roughly 23% of the world’s known rare earth reserves, with the potential to significantly offset global dependence on China. Yet, until recently much of that potential remained untapped.
Brazil’s rare earths sector, however, is beginning to show signs of life. Highlights include:
- A growing array of active and early-stage rare earths projects with the potential to meet a significant percentage of the global demand over the coming decade focused on developing the full value chain, from extraction to processing.
- Robust public-private financing frameworks, through initiatives such as Project Magbras and BNDES-Finep’s R$5 billion call for proposals in the critical minerals space, to support projects across the value chain.
- Efforts by prospective producers in Brazil to attract buyers in the U.S. and other Western countries as a strategy to secure low-cost funding and to diversify funding sources and customer bases.
The wave of initiatives reshaping the Brazilian critical minerals space signals the country’s potential and intent to become a major player in the global supply chain. As the country steps up the push to stimulate the development of domestic capacity for value-added processing, attract international technology transfers, and strengthen supply chain resilience for global partners seeking alternatives to a highly concentrated market, promising investment opportunities for scalable production will abound for multinationals, junior mining operations in the REE sector, technology and manufacturing companies interested in offtake arrangements, as well as equity firms and other investors.
In a time of geopolitical realignment and trade uncertainty, Brazil’s critical minerals sector is on the cusp of unprecedented growth, positioning itself not just as a resource hub – but as a long-term strategic partner.
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