Fight to break China's rare-earth dominance moves to new front in Brazil

Western companies are pouring money into Brazil's rare-earth industry, hoping the South American nation can help loosen China's grip on the minerals used in electric vehicles, wind turbines and advanced weapons.

- Samantha Pearson

Miners are racing to develop deposits across Brazil, which holds the world’s second-largest rare-earth reserves after China. But the ambitions extend beyond digging up ore. Companies and government officials say they want to build processing plants that can separate rare earths, produce metals and eventually manufacture magnets.

The realization of that ambition would represent a much bigger challenge to China. While Beijing holds roughly half of global rare-earth reserves, it controls more than 90% of processing and magnet production, giving it a dominating influence over global supply chains.

“This is world-class geology,” said Rafael Moreno, chief executive of Australian-listed miner Viridis, one of several companies developing projects in southeastern Brazil. “Brazil is now positioned to play an increasingly strategic part in supplying critical raw minerals to Western economies.”

The push has turned Brazil into a focal point in the struggle between Washington and Beijing over critical minerals. The U.S. has been scouring the globe for rare earths, backing projects in an effort to loosen Beijing's grip on the industry.

Yet Brazil has resisted pressure to join a U.S.-led minerals bloc, insisting it will accept investment from any country willing to help develop the industry.

“Brazil is open to investments from whichever country respects our sovereignty,” Mines and Energy Minister Alexandre Silveira said in an interview. “We've been in talks with various foreign players including the U.S., the European Union, China and others.”

Pocos de Caldas, a city built in the caldera of an extinct volcano, has become one of the centers of the rush. A towering Christ the Redeemer statue overlooks a landscape rich in the clay deposits that miners think could help reshape global supply chains.