Brazilian strategic minerals caught in middle of tariff discussions with US

Negotiations over critical and strategic minerals must involve the Brazilian federal government, the director-president of the Brazilian Mining Institute told the chargé d'affaires and official representative of the US Embassy in Brazil this week.

The US representative, Gabriel Escobar, met July 23 with representatives of the Brazilian Mining Institute in Brasilia to discuss the United States' interest in potential agreements with the Brazilian mineral sector, according to the institute, or IBRAM.

"They reaffirmed this interest, showing that they are genuinely concerned and interested in rare earths," the institute's director-president, Raul Jungmann, said in a recent interview with local media. "I responded to them that, as the Brazilian constitution determines that the subsoil and minerals belong to the union, this is a government agenda."

With the ambassador position vacant, Escobar has been representing US interests in Brazil. The official representative of the US Embassy in Brazil showed interest in the National Policy on Critical and Strategic Minerals being prepared by the Brazilian government, as well as parliamentary initiatives in the same context, according to IBRAM.

Deadline approaching

The meeting took place a few days before the deadline set by US President Donald Trump to impose a 50% tariff on Brazil, starting Aug. 1. The measure, announced July 9, cites legal charges against former Brazilian President Jair Bolsonaro as justification for the decision and marked a significant escalation in bilateral trade tensions.

At an event in Vale do Jequitinhonha, Minas Gerais, President Luiz Inácio Lula da Silva reiterated July 24 his defense of Brazilian sovereignty and mentioned minerals among other national resources.

"We have all the rich minerals you want to protect," Lula said. "And here, no one lays a hand. The only thing I ask of the American government is to respect the Brazilian people as I respect the American people."

Attention on critical minerals

The Brazilian presence on the map of strategic minerals has increasingly attracted attention from governments and companies around the world. Lithium, niobium, graphite and the so-called rare earth elements, used in the production of batteries, electronic equipment and military gear, are at the center of these discussions.

Brazil has the second-largest reserves of of rare earth elements globally, second only to China, according to the US Geological Survey. The Ministry of Mines and Energy puts Brazilian reserves at about 21 million mt. Currently, national production accounts for only 1% of global production.

Brazil is the world's sixth-largest lithium producer, behind countries including Australia, Chile and China, according to the US Geological Survey. Almost all of the country's production goes to China.

Platts, part of S&P Global Energy, assessed lithium spodumene FOB Brazil July 25 at $800/mt, up $50 on the day and the same value recorded at the launch of the assessment March 24.