Brazil Eyes Rare Earths to Boost Tech and Industrial Growth

The turbines in a wind farm, like this one in the Northeast region of Brazil, contain magnets made from rare earths in their generators. This makes rare earths, which Brazil has in abundance, indispensable for both decarbonized electricity generation and the development of electric motors in the automotive sector and others.

Brazil, long known for exporting basic products like iron ore, oil, coffee, and soybeans rather than industrialized goods with higher added value, now aims to shift its focus toward rare earths, a key component in new technologies that the country has in abundance.

Brazil ranks second in rare earth reserves, estimated at 21 million tons, surpassed only by China’s 44 million tons, explained Julio Nery, director of Mining Affairs at the Brazilian Mining Institute (Ibram). Together, the two countries account for about two-thirds of global reserves.

“The critical phase of processing, which adds the most value, is the separation of rare earth elements. Costs are high due to numerous successive treatments, not because of the technology,” said Fernando Landgraf.

However, Brazil is only beginning to exploit this resource on a large scale, while China maintains a near monopoly on refining—about 90% of the world total—to supply its electronics industry, electric vehicles, wind turbines, and numerous other products worldwide.

Demand for rare earths has surged, partly due to the US-China trade tensions. China’s threat to restrict exports of rare earths forced former President Donald Trump to negotiate and reduce tariffs from 145% to 30%.

Rare earths are named not for scarcity—they exist in many places—but for their unique physical properties, such as magnetism, explained Nery. The sector consists of 17 chemical elements with additional electrochemical and luminescent properties.

Geopolitical tensions have prompted many countries to seek alternatives to China’s rare earths.

In Brazil, an alliance of 38 companies, research institutions, and development foundations, led by the Federation of Industries of Minas Gerais (Fiemg), aims to develop the entire rare earth chain, “from mining to permanent magnets.”

Permanent magnets, containing four of the 17 rare earth elements, are highly valuable due to their use in electric motors, cell phones, electronics, wind turbines, and defense and space technologies. This is the focus of the MagBras project, officially launched on July 14 in Belo Horizonte.

The project seeks to unite industry, universities, and research centres so Brazil does not remain primarily an exporter of raw materials without added value, as is the case with coffee, iron, oil, and soybeans.

Rare earth processing technology was developed decades ago in many countries, which later abandoned it due to China’s low-cost production, recalled André Pimenta, project coordinator at Fiemg’s Rare Earths Institute.

Brazil has large ionic clay deposits, which offer advantages over rocky deposits elsewhere. With technological advances, Brazil could emerge as an alternative producer, though surpassing China remains “difficult or even impossible,” Pimenta noted.

MagBras operates a laboratory in a facility designed for 100 tons of magnets per year—the only one in the Southern Hemisphere—for research and small-scale production.

Nery warns of the risks of focusing on a single resource over a broader range of critical minerals, such as lithium, cobalt, and nickel, which are also scarce.

Demand for permanent magnets, used in imported batteries, electric car motors, and wind turbines, must be stimulated internally, he stressed.

Research centres have developed refining solutions—the most costly step—but industrial-scale production will require significant investment and time, noted Nery. Mining projects typically take at least five years for geological studies, licensing, and operational preparation.

Brazil now focuses on ionic clay rather than monazite, which contains radioactive material. Ionic clay deposits are superficial, facilitating research and reducing environmental impacts.

Serra Verde, a company backed by US and UK funds in Minaçu, Goiás, began operations in 2024 and has exported US$7.5 million to China. It produces oxide concentrate as the first processing step, enriching rare earth content in clay (0.12%). The concentrate includes high-demand elements for permanent magnets: neodymium, praseodymium, dysprosium, and terbium.

Serra Verde aims to produce 5,000 tons annually, doubling by 2030, but in the first half of 2025, only 480 tons were exported. Another project in Goiás, the Carina Module by Canada’s Aclara Resources, plans to extract mainly dysprosium and terbium from 2026 with US$600 million investment.

“The critical and most valuable phase is separating rare earth elements, which is costly due to repeated treatments, not technology,” said Fernando Landgraf. One kilogram of neodymium oxide is worth at least ten times more than a kilogram of concentrate.

“The biggest business risk is uncertainty,” he noted. Though demand will grow, US production could lead to oversupply. Rare earth markets are limited compared to iron ore.

“Uncertainty does not justify inaction. The movement to reduce dependence began during the pandemic when many lacked essential medical equipment,” stated Pimenta.

Geologist Nilson Botelho considers Brazil’s reserve estimates reliable. Goiás’ heavy rare earths are among the most critical and valuable. Many other regions in Brazil also hold deposits, aided by favorable geological and climatic conditions.

Geologist Silas Gonçalves cautions that mining in ionic clay still impacts the environment—altering landscapes, soil, water tables, and causing deforestation.