Investment shift toward rare earth elements
Brazil is drawing increasing rare earth investment as global demand rises for critical minerals used in electric vehicles, renewable energy systems, artificial intelligence infrastructure, and other advanced technologies. Industry executives and geologists say the country could become one of the world’s most significant producers of rare earth elements. Andrew Tunks, Chief Executive Officer of Meteoric Resources, has described Brazil as a future competitor to China in the rare earth sector.
Meteoric Resources is investing in Brazil through its Caldeira Project in Minas Gerais. The deposit is widely regarded as one of the largest ionic clay rare earth resources globally. The resource is noted for containing medium and heavy rare earth elements including dysprosium and terbium, which are used in high-performance permanent magnets for electric vehicles, wind turbines, robotics, and other technologies.
Rising magnet rare earth demand
Electrification and clean energy transitions are driving demand for rare earth minerals. Projections from the International Energy Agency (IEA) indicate that consumption of key magnet rare earths—neodymium, praseodymium, dysprosium, and terbium—has already doubled since 2015. The IEA projections also point to further significant growth during the coming decade.
Growth in electric mobility, renewable energy installations, automation, artificial intelligence, robotics, and digital infrastructure is adding pressure to global supply chains. Rare earth elements are used for powering data centers and manufacturing electric motors, alongside next-generation industrial technologies. As a result, governments and corporations are seeking access to these materials more actively.
Reserve base and application surge
Brazil’s geological potential underpins its role in the critical minerals race. The country is estimated to hold approximately 21 million tonnes of rare earth reserves, placing it second globally behind China. China controls roughly 44 million tonnes, according to the figures cited.
The National Mining Agency has seen a surge in exploration and development interest. Between 1975 and 2020, slightly more than 250 rare earth mining applications were submitted nationwide. In contrast, the period between 2023 and 2024 generated more than 1,600 new applications.
Project acquisitions and expanding international involvement
The expansion of Brazilian rare earth activity has also been reflected in capital markets. Companies with exposure to Brazilian projects have reported strong stock market performance as investors seek opportunities in the critical minerals sector. Several international firms—including Australian, Canadian, and American mining companies—have increased their presence in Brazil to secure future supply.
A major transaction highlighted this trend when USA Rare Earths acquired Serra Verde’s rare earth operations in Goiás for approximately $2.8 billion. The deal drew attention because Serra Verde operates Brazil’s only active rare earth mine. Industry sources describe the Pela Ema operation as capable of producing all four key magnetic rare earth elements outside Asia at commercial scale.
The Pela Ema operation is also linked to long-term supply agreements supporting critical industrial and government requirements in the United States. European cooperation with Brazil in critical minerals has also been increasing, with Germany expanding collaboration on strategic raw materials, energy transition initiatives, green industrial development, and supply chain resilience.
China’s refining position and diversification efforts
Even with a large resource base, Brazil faces constraints before it can compete directly with China across the supply chain. For decades, Brazil’s mining sector has focused on extracting and exporting raw materials while higher-value processing and refining have largely occurred elsewhere. China has built an integrated ecosystem spanning mining through refining and magnet manufacturing.
The concentration is reflected in processing capacity and magnet production. China controls more than 90% of global rare earth refining capacity and dominates permanent magnet production with an estimated market share approaching 95%. Export restrictions during trade tensions with the United States disrupted global supply chains and contributed to shortages affecting electronics and technology manufacturers.
Countries including Brazil, India, Vietnam, Sweden, and Norway are pursuing strategies aimed at developing domestic value chains that include mining, processing, refining, and manufacturing capabilities. Industry experts note that building integrated networks will require substantial investment and multiple years of development.
Ionic clay geology and operating conditions
Brazil’s geological profile supports its rare earth plans. Experts from the Brazilian Geological Society estimate that about 73% of the country’s rare earth resources occur within ionic clay deposits. These formations are described as advantageous because natural weathering processes have already altered the original rock.
The weathering effect can make rare earth elements easier to extract and potentially reduce extraction costs compared with many hard-rock deposits elsewhere. Industry specialists say this characteristic could improve Brazil’s competitiveness as global demand continues to rise.
Operating conditions are also cited as part of the project economics. Rare earth separation and processing require substantial electricity and water inputs. Brazil is described as having abundant renewable energy resources alongside comparatively affordable power costs.
Mining executives contrast this with other jurisdictions where energy costs may be higher or water availability more limited. Australia is specifically mentioned as facing higher energy expenses and more limited water availability, factors that can increase production costs and affect competitiveness.
Positioning for a diversified market
Brazils role in the global rare earth market is tied to its reserve base, geology, international investment activity, and access to renewable energy resources. The combination of these factors is presented as a basis for future growth within the sector.
While China remains dominant across the supply chain described in the figures cited earlier, Brazil’s expanding activity suggests potential diversification over time. If domestic refining and manufacturing capabilities develop alongside mining operations, Brazil could become a significant supplier of rare earth elements used in technologies driving future industrial demand.
