INTERVIEW: Brazilian Rare Earths foresees emergence of ‘western’ price in rare earths market

ASX-listed mine project developer Brazilian Rare Earths (BRE) foresees an emergence of a formalized "western" rare earths market price to complement the Chinese price, which currently dominates the market, particularly in Asia, said company CEO Bernardo da Veiga.

"There will have to be bifurcated pricing, with a western, ex-China price alongside the China price," da Veiga told S&P Global Energy in an interview. "But [western production] volumes need to tick up significantly before rare earths can be traded on western exchanges."

Currently, trading occurs on China's Shanghai Metals Market, which lists prices for rare earths products, including salts, carbonates, concentrates, flakes, oxides, metals, magnets and scrap.

An informal ex-China price exists, around three times higher than Chinese quoted prices, noted da Veiga.

"Even in China, prices are up 50% year to date," as demand for the product grows, he said.

A "western" price will come in the first place from governments, da Veiga foresees. The US government has already put out a floor price, being used by project developer MP Materials, which has gained US government backing. The Australian government has said it will do something similar, according to the BRE CEO.

Australia, home to major producer Lynas Rare Earths, is currently the largest miner of rare earths outside China. However, China still accounts for more than 50% of global rare earths mining capacity and almost 90% of processing and refining, with particular dominance in sought-after heavy rare earths. These are less common than the lighter varieties, and are needed to make magnets permanent or high-performance.

"It's very difficult to go out and buy material right now on the market... at other than illusory prices," da Veiga continued. "Because the industry is still so small, it's easy for the Chinese to weaponize prices via issuing quotas and the like, and to have any losses subsidized."

The lack of an established ex-China market puts pressure on would-be buyers to set up long-term offtake arrangements from projects where production may still be years off. Although BRE, with both heavy and light rare earths deposits, expects completion of its project feasibility study only in Q1 2026, it is in advanced discussions to sell part of its planned heavy rare earths output, including dysprosium and terbium, to an offtaker, da Veiga reports. S&P Global understands this is a magnet recycler, possibly in the US.

In recent years, new rare earths mine and processing projects have emerged outside China - in Brazil, Canada, the US, Australia and various African nations - in an effort to reduce the dependence on Chinese material for users in the western electric vehicles, wind turbine and robotics sectors. However, some mine projects have been dogged by environmental licensing setbacks.

Brazil strategy

BRE is now to embrace domestic processing in line with federal government policies, da Veiga said.

"Our strategy has shifted," he said. "We now hope to do a lot more processing in Brazil, initially separating out the light rare earths oxides, while heavy rare earths carbonate would be sent abroad for further processing, although the plan is to eventually process these in a joint venture in Brazil."

The company is seeking a technological partnership for rare earths processing and magnets recycling in Brazil, the CEO said.

Products planned are neodymium oxide and praseodymium oxide, as well as the heavy rare earth carbonates, da Veiga said. Environmental licensing should be facilitated by BRE's high-grade Monte Alto project in Bahia state, northeast Brazil, being a hardrock deposit, where mining would require less land movement and water usage for processing than mining in ionic clay deposits.

Brazil is set to launch a national policy for its critical minerals development in H2. Ministers have stated they "don't want to make the same mistakes as with iron ore", the bulk of which is exported without advanced processing.

BRE has been shortlisted to gain financing for critical minerals projects from national development bank BNDES. The bank is putting up some $1 billion to speed development in this area, to finance companies' domestic processing initiatives.

Demand for rare earths from robotics, including applications in industry and drones, is "set to dwarf" demand from electric vehicles, claims da Veiga. "Robotics is the big one because robots need so many more magnets than cars," he said.

Robots will be used increasingly in nations with expensive labor costs, da Veiga noted. "Adoption of EVs is meanwhile a given, while military demand for rare earths continues to be limited in nations including the US," he said.