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Only surpassed by China, the country has about 21 million tons (23% of the global total) of these critical minerals, but accounts for an effective production of no more than 1% of the world demand.
Total dependence on foreign countries is a recurring mindset
This contrast reflects the narrow-minded local mentality, as the local market is limited to the extraction of raw materials, making it totally dependent on the refining process abroad.
But this is not the only paradox here. While the volume of research authorization requests ‘explode’, the National Mining Agency (ANM) faces the threat of budget cuts amounting to R$ 22.7 million, which could result in the breach of international agreements.
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At the same time, from 2023 to the beginning of June this year, about 3,000 research requests were recorded, whereas between 1975 and 2022, there were only 745 requests.
For better understanding, it is explained that the research request is the first phase of a long period until the granting of mining rights, when a company receives authorization to exploit a deposit.
ANM: external commitments require institutional structure
According to the evaluation of the ANM’s director-president, Mauro Sousa, “We have created international commitments and we need to have an institutional structure capable of providing appropriate responses. When this happens, we lose the ability to fulfill what the Brazilian State is committing to,” he said.
Sousa adds that “there is a contradiction between the country’s strategic objectives and the reduction of resources allocated to the agency” and that “we fail when we cut resources that do not allow what was agreed to be effectively fulfilled. This is a contradiction of the Brazilian State.”
Budget cut is expected to interrupt technical inspections
One of the most immediate negative impacts, if the measure is confirmed, is the prospect that 43 dams and 18 mining piles that should receive technical inspections by the end of the year may be left out of the initially planned schedule.
The category of ‘rare earths’ constitutes a group of 17 chemical elements found in nature (lanthanum, cerium, praseodymium, neodymium, promethium, samarium, europium, gadolinium, terbium, dysprosium, holmium, erbium, scandium, thulium, ytterbium, lutetium, and yttrium), usually mixed with other minerals that are difficult to extract and have high commercial value.
Application of critical minerals in new technologies is strategic
Their application is diverse, ranging from the manufacture of wind turbines, electric car batteries, transmission cables, rockets, medical equipment, to weapons and cutting-edge electronic devices. Thus, these minerals play a vital role in the energy transition, especially in the defense and high-tech production sectors, which are the target of intense political disputes and negotiations by central countries.
At least, potentially, according to the Geological Survey of Brazil (SGB), the main national reserves are distributed across 12 states, but with greater concentration in five main hubs. They are:
- Minas Gerais (Araxá, Tapira, and Poços de Caldas): Araxá hosts the only officially recognized reserve integrated with alkaline rock complexes with niobium and phosphate. Poços de Caldas has highly valued ionic clay deposits.
- Goiás (Minaçu and Nova Roma): Concentrates some of the most promising and large-scale projects specifically aimed at heavy rare earth elements.
- Amazonas (Pitinga and Seis Lagos): Pitinga has deposits associated with tin. The Seis Lagos region is one of the largest untouched mineral frontiers, but surrounded by environmental restrictions.
- Bahia and Sergipe: They present strong potential in coastal deposits (monazitic) and clay formations.
Specific projects
- Serra Verde Project (Minaçu): It is the only commercial rare earth plant operating outside Asia. The project focuses on ionic adsorption clay (easy extraction) and was recently acquired by the American USA Rare Earth for US$ 2.8 billion. The move generated a strong geopolitical response: China imposed export blockades against the American controller, highlighting the strategic value of the Goiás operation.
- Carina/Aclara Resources Project (Nova Roma): Estimated investment of R$ 2.8 billion focused on ionic clays, with a forecast of high sustainability as it does not require explosives and reuses almost 100% of the water.
- Viridis Project (Minas Gerais): An initiative advancing in negotiations with the European Union to obtain financial support and price protection mechanisms. The strategic differential of this project is focusing on the local refining of minerals, breaking the pattern of only exporting raw material.
- Serra Verde Project (Minaçu): It is the only commercial rare earth plant operating outside Asia. The project focuses on ionic adsorption clay (easy extraction) and was recently acquired by the American USA Rare Earth for US$ 2.8 billion.
The move generated a strong geopolitical response: China imposed export blockades against the American controller, highlighting the strategic value of the Goiás operation.
- Carina/Aclara Resources Project (Nova Roma): Estimated investment of R$ 2.8 billion focused on ionic clays, with a forecast of high sustainability as it does not require explosives and reuses almost 100% of the water.
- Viridis Project (Minas Gerais): An initiative advancing negotiations with the European Union to obtain financial support and price protection mechanisms. The strategic differential of this project is focusing on local refining of minerals, breaking the pattern of only exporting raw material.
Implementation of National Refining Industries is a Central Issue
From a strategic point of view, Brazil’s biggest structural challenge is to avoid the historical model of exporting raw mineral commodities. To add value to rare earths, the country needs to overcome the absence of national separation/refining industries, technological deficiency for magnet manufacturing, and bureaucratic and environmental barriers in mining.
Currently, the country is limited to only the first of the three stages of rare earth exploration, the upstream (mining and extraction), in which it has competitive projects in ionic adsorption clay deposits.
In the second (midstream, separation and refining) and third (downstream, alloys and permanent magnets) stages, the country is not present.
According to specialists, the biggest bottleneck in the sector relates to the midstream – which consists of transforming ore into high-purity oxides – whose technology is currently dominated by China.
In the case of downstream – the stage with the highest added value, crucial for electric car motors and wind turbines – the Brazilian industrial park is incipient.
The main structural bottlenecks include:
Technological mastery and supply chain: knowledge in chemical separation is restricted. Without industrial-scale refining capacity in the country, the trend is for raw material to be exported and then repurchased already in the form of expensive technological components.
Environmental and regulatory challenges: the chemical leaching process requires a high volume of water, generating risks of scarcity and pollution that require complex studies. Additionally, environmental licensing is slow, and the regulatory framework is challenging, impacting even preservation areas or those near protected lands.
Structure of ANM (National Mining Agency): The expansion of geological knowledge depends on the regulatory agency. Technical bodies have suffered from budgetary restrictions and blockages, affecting the speed of research approvals and area releases.
Lack of Scale and Local Demand: The internal consumer market for technologies using rare earths is still developing. The attraction of global capital has occurred more due to an international geopolitical race (such as the interest of the United States in diversifying suppliers) than due to native industrialization planning.
