[Text/Observer Network Zhang Jingjuan] China's strengthened control over the export of critical minerals has caused complaints from the West, which is trying to find other ways to obtain them. Lula's recent remarks on minerals were interpreted by the Nikkei Asia on the 12th as Brazil, which ranks second in rare earth reserves, intending to become an alternative supplier.
However, China's rare earth smelting technology has obvious advantages, and the extent to which Brazil can replace China's rare earth production remains to be seen. Moreover, at present, Brazil's rare earth sales are still mainly aimed at China.
The report pointed out that last month, Lula expressed that Brazil hopes to strengthen research and exploration of key minerals, "which has become a global focus, and Brazil cannot miss this opportunity."
Lula emphasized that his goal is to turn Brazil into an economic powerhouse through international cooperation in resource development. Currently, only about 30% of Brazil's land has been surveyed. The Brazilian government plans to simplify environmental investigation and exploration licensing processes as early as this year.
According to data from the United States Geological Survey (USGS), Brazil has approximately 21 million tons of rare earth reserves, second only to China, far higher than India (6.9 million tons) in third place globally, and more than ten times the amount of U.S. reserves.
However, despite Brazil's rare earth reserves accounting for one-fifth of the world's total, its output is extremely low. Currently, China accounts for about 70% of global production, followed by the United States (12%) and Myanmar (8%).
The report pointed out that during the tense relations between China and the United States, rare earth metals, which are crucial for the production of electric vehicles and weapons, have become a strategic weakness for the United States. Meanwhile, China's control over rare earth exports also affects the production of global automobiles and other products.
On April 2nd, the Trump administration announced "reciprocal tariffs" on Chinese goods. Just two days later, China implemented a series of precise countermeasures, including export controls on seven categories of medium and heavy rare earth-related items such as samarium, gadolinium, terbium, dysprosium, lutetium, scandium, and yttrium.
The report noted that under these circumstances, Brazil's potential stands out. In January this year, the Brazilian Development Bank (BNDES) and the Science and Technology Innovation Fund (Finep) announced the provision of 5 billion reais in financial support for enterprises, including credit lines and equity investments. These funds can be used to build a mineral supply chain including lithium, rare earths, nickel, graphite, and silicon, and invest in producing batteries, photovoltaic cells, and magnets required for electric vehicles and wind turbines. A total of 124 project proposals were submitted before the deadline, exceeding 85 billion reais. Classified by industry, 27 projects involve rare earths, with the largest share.
Serra Verde Group's mining facilities in Minas Su in Brazil Serra Verde Group website
The Brazilian government stated that there are currently 27 rare earth projects underway in Brazil. The first large-scale rare earth mine in Goias State, Brazil, began production in 2024.
The operating company, Brazilian mining company Serra Verde Group, produces four rare earths needed for electric vehicle and wind turbine permanent magnets, including neodymium and praseodymium.
In October 2024, the U.S. government announced that Serra Verde was included in the "Mineral Security Partnership" (MSP) global project list led by the United States in June 2022. Some people call MSP the "metal NATO." Participants in MSP include: Australia, Canada, Estonia, Finland, France, Germany, India, Italy, Japan, Norway, South Korea, Sweden, the United Kingdom, the United States, and the European Union. Serra Verde has received $150 million in investment from the United States and the United Kingdom to ensure the supply chain.
In Minas Gerais, Brazil, a rare earth exploration project covering about 190 square kilometers led by a foreign company is ongoing. Production is expected to begin after 2027, with the U.S. Export-Import Bank providing approximately $250 million in loans.
Middle Eastern companies are also considering procurement in Brazil. Saudi Arabian Mining Company (Ma'aden) announced a plan in January this year to invest approximately 8 billion reais in mineral exploration in Brazil and opened an office in Sao Paulo. The UAE has signed a memorandum of understanding with the Brazilian government to invest 15 billion reais in mineral exploration.
Japan has also signed a memorandum of understanding with Brazil to jointly build a critical mineral supply network. Toshiba and other Japanese companies use niobium (Brazil is a major producer of niobium) to develop electric buses equipped with next-generation lithium-ion batteries.
However, the report pointed out that the extent to which Brazil can replace China's rare earth production remains to be observed. Rare earth smelting technology is concentrated in China. It will take about 15 years from the concept to the implementation of Serra Verde's project, and its initial goal was to sell based on China's processing technology. Although the company has not disclosed details of its rare earth sales targets, it is likely to remain primarily exported to China in the short term.
Rare earths are crucial for the automotive, semiconductor, aerospace, and defense industries, but their extraction and separation are very difficult. China has consistently dominated in rare earth mining and refining, and in the case of heavier rare earths with higher atomic numbers, China is almost the only country with the capability to separate and process them.
According to International Energy Agency data, in 2023, China accounted for more than 60% of global rare earth ore production, but controlled 92% of the processing stages, almost monopolizing the global rare earth processing sector. The U.S. Geological Survey stated that from 2020 to 2023, 70% of the United States' rare earth compounds and metal imports came from China.
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Original source: https://www.toutiao.com/article/7515335069821600296/
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