Brazil's rare earth projects seek partnerships to enhance energy security

Brazil's rare earths sector is gaining momentum, with key industry players outlining the country's potential to become a vital player in the global energy transition.

During the Brazil Lithium and Critical Minerals Summit held in Belo Horizonte June 4-5, discussions highlighted Brazil's abundant resources and the need for strategic partnerships to explore potential reserves and ensure energy security.

"Development of rare earth and critical minerals projects is no longer just a matter of energy transition but rather energy security," Tiago Abreu, chief development officer of Brazilian Rare Earths, said during the event.

Brazil has the second-largest global reserve after China of rare earths, which are essential for manufacturing high-performance permanent magnets used to build powerful motors for several cutting-edge applications, including electric vehicles and wind turbines. The supply chain of these minerals is concentrated in China.

"There is a geopolitical tension that drives us to seek partnerships to reduce dependence on China," said Murilo Nagato, country manager at Aclara Resources. "The timing is important as each geography works to finalize the agreements and our projects are evolving to be executed."

In Minaçu, in the state of Goiás, mining company Serra Verde was the first to start operations for rare earth mining in the country, in 2024.

In Poços de Caldas, in the state of Minas Gerais, Australian companies Viridis Mining and Minerals and Meteoric Resources have mining rights to explore ionic clay. Viridis estimates an investment of $280 million, which would come in part from offtake agreements.

"We are talking to several development banks in different countries like Europe and Japan, and everyone seeks offtake contracts, but there is no established industry yet," said Klaus Petersen, country manager at Viridis Mining.

Along with Australian Ionic Rare Earths, Viridis has a project to build a selective separation refinery.

Marcelo de Carvalho, country manager at Meteoric Resources, highlighted that operational costs are competitive with those of Chinese projects.

"We want to create a new market with traceability," Carvalho said. "This is the great opportunity we have to stand out in this market. The reality is that the West needs to accelerate financing for these projects."

In Jequié, Bahia state, the Australian-based companies Brazilian Rare Earths and Equinox Research are advancing in hard rock and ionic clay drilling. Abreu mentioned the significant mineralization potential in the region, with over 30% rare earth oxides.

"Brazil could become a leader in the sector, with an estimated reserve of 21 million metric tons of rare earth metals," Abreu added. "If we identify the full potential, we can mitigate the risk associated with Chinese supply."

A study by the National Mining Agency identified 27 research projects under development by 17 companies in seven states.

The National Bank for Economic and Social Development, in partnership with the Financing Agency for Studies and Projects (Finep), has an open public call to support investments in the value chains of strategic minerals, including rare earths.

The projection is to mobilize Real 5 billion ($893 million) for business expansion and research plans. Also, the Strategic Minerals Investment Fund will support small and medium enterprises with an additional Real 1 billion ($178 million).

Of the 17 minerals present in rare earths, each has a specific application. Neodymium and praseodymium, for example, become supermagnets that primarily drive electric cars and wind turbines. Dysprosium increases the thermal resistance of gas turbine alloys; terbium and europium make cell phone and TV screens shine. The chemical separation of each element is costly and complex.

"Despite the challenge, the operational costs of our projects are very close to those of China's projects, and this allows us to survive in various market conditions," Carvalho said.