1. Home
  2. / Economy
  3. / The 50-Cent Paradox: The Unbelievable Reason Brazil Is Unable to Profit from Rare Earths
Reading time 3 min of reading Comments 2 comments

The 50-Cent Paradox: The Unbelievable Reason Brazil Is Unable to Profit from Rare Earths

Written by Carla Teles
Published on 08/08/2025 at 20:59
O paradoxo de R$ 0,50: O motivo inacreditável que impede o Brasil de lucrar com terras raras
Rico em terras raras, por que o Brasil não lucra com essa riqueza? Entenda o incrível paradoxo de R$ 0,50 que trava uma indústria de milhares de dólares e nos prende ao passado.
  • Reaction
  • Reaction
  • Reaction
  • Reaction
13 people reacted to this.
React to this article

USP Specialist Reveals How the Country, Rich in Strategic Minerals, Misses the Chance to Process Materials Worth Thousands of Dollars by Not Producing Inputs That Cost Cents.

Nationwide sovereignty and the exploration of strategic resources have returned to the debate, but Brazil remains in a vulnerable position. Despite its immense potential in rare earths, the country continues to be a mere exporter of raw materials, without adding value. The reason, according to USP professor Cláudio Schon, is surprising: we stop processing highly valuable materials because we cannot produce basic and cheap inputs.

Mineral Wealth Without Industrial Processing

The major challenge facing Brazil in the strategic minerals sector was pointed out by USP professor Fernando Landgraaf: it’s not enough to just mine. It’s crucial to process the ore and, finally, to have an industry that transforms metals into products. Without this complete chain, the country loses the most lucrative part of the business.

The extent of this missed opportunity is shocking, as summarized by professor Cláudio Schon: “We fail to process something that costs 5 thousand dollars per gram because we cannot produce something that costs 50 cents per liter.”

How Brazil Lost Its Lead in the Sector

Ironically, Brazil has been at the forefront technologically. Decades ago, the country not only researched but also produced high-value materials, such as nickel superalloys and aerospace aluminum alloys.

However, strategic projects were discontinued, such as the development of rare earth-based magnets at the Physics Institute during the 1980s, vital components for modern technologies. The setback is so great that today, a collaborator of professor Schon had to import a special aluminum alloy from Europe because it was not available in the national market.

Where Are the Entrepreneurs to Invest?

In Schon’s view, the blame for the stagnation does not lie with academia or the government. He is emphatic in stating: “The university does its job, I feel that the government does its job. What is lacking now is for the business community to respond.” The professor laments the absence of visionary entrepreneurs with capital willing to invest in reclaiming these technologies in the country.

The Factor That Discourages Innovation in Industry

Complementing the analysis, journalist Luís Nassif points to another major villain: the high cost of capital in Brazil. With the Selic rate being high for so long, entrepreneurs have a greater incentive to invest in the financial market rather than invest in industrial innovation, which is seen as a higher-risk activity with slower returns.

A Path to the Technological Future

Despite the scenario, initiatives like the green hydrogen project from RCGI (USP/Shell) show a possible way forward. The research, focused on obtaining hydrogen from ethanol, circumvents transportation risks and takes advantage of an abundant resource in Brazil.

According to Schon, this should be a central bet. Ethanol is one of the safest ways to transport hydrogen, and the technology has enormous potential for application and export, representing a new chance for national innovation.

Sign up
Notify of
guest
2 Comments
most recent
older Most voted
Built-in feedback
View all comments
Henrique
Henrique
10/08/2025 22:51

O governo faz o seu trabalho? A universidade fez o seu trabalho?

afff… que mundo esse professor da USP vive?!?

Dercidio Nava
Dercidio Nava
10/08/2025 11:02

Na década de 80, no governo militar, o governo investia em tecnologia, mas o governo que sucedeu tentou passar esses investimentos para a iniciativa privada, mas com a taxa de juros muito alta ninguém quer arriscar investir em novas tecnologias. Outro fator é a insegurança jurídica, a insegurança tributária e a falta de políticas públicas mais concretas para exploração de terras raras. A maioria dessas terras estão em terras indígenas, e proibidas de serem exploradas.

Carla Teles

I produce daily content on economics, diverse topics, the automotive sector, technology, innovation, construction, and the oil and gas sector, with a focus on what truly matters to the Brazilian market. Here, you will find updated job opportunities and key industry developments. Have a content suggestion or want to advertise your job opening? Contact me: carlatdl016@gmail.com

Share in apps
2
0
I'd love to hear your opinion, please comment.x