Brazil - the world's new source of rare earth elements.

Global mining giants are betting on Brazil as a new powerhouse for critical magnetic metals and as a way to reduce reliance on rare earth minerals from China.

Pela Ema rare earth mine in Brazil. Photo: Mining Technology

As China leveraged its dominance in rare earth minerals to retaliate against U.S. tariffs last year, disruptions to production at factories in the U.S. and Europe highlighted the vulnerability of the supply chain.

Although the trade truce between the two countries included easing Beijing's export controls on rare earth minerals, Western businesses are still actively seeking alternative sources of supply.

An opportunity for Brazil

This context presents an opportunity for Brazil. With reserves of approximately 21 million tons, Brazil ranks second in the world in rare earth reserves. Meanwhile, China leads with 44 million tons.

To date, Brazil has yet to fully exploit its rare earth potential. Last year, the country accounted for only about 0.5% of global rare earth production. However, that share is beginning to increase as more and more foreign investors provide funding to help rare earth projects in Brazil move from the exploration phase to commercial production.

Australian mining company Meteoric Resources is investing heavily in rare earth mining operations in Brazil. The company's Caldeira project, located in the state of Minas Gerais, is believed to be the world's largest ionic clay mine.

These clay deposits are one of the most important sources of “medium” and “heavy” group rare earth elements, such as dysprosium and terbium. These are two of the essential elements (alongside neodymium and praseodymium) for producing high-performance magnets used in wind turbines and electric vehicles.

In April, the American company USA Rare Earths acquired Pela Ema – Brazil's only operational rare earth mine – from the Brazilian mining company Serra Verde for $2.8 billion. Located in the state of Goiás, the mine is considered a unique asset and the only producer outside of Asia capable of supplying all four rare earth elements necessary for magnets on a large scale.

According to the Brazilian Geological Survey, as of March, there were more than 60 rare earth projects under development across the country, spanning various stages from exploration to preparation for mining.

According to the International Energy Agency (IEA), demand for rare earth elements used in magnet manufacturing has doubled since 2015 and is projected to increase by 33% by 2030. The growing demand for automation, robotics, and digital technologies will continue to fuel the demand for rare earths – essential materials for artificial intelligence (AI) data centers and advanced robotic systems.

Efforts to refine rare earth elements

Unlike China, this South American country has so far mainly exported raw materials instead of processing and refining them domestically.

China currently accounts for over 90% of the world's rare earth refining capacity. The world's second-largest economy also dominates the permanent magnet manufacturing sector, with a market share of approximately 95%.

Currently, Brazil, along with other resource-rich countries such as India, Sweden, and Norway, is looking to build its own rare earth value chains.

From a geological perspective, Brazil holds a significant advantage over other countries in terms of its large rare earth reserves. Approximately 73% of the country's rare earth deposits are ionic clays. Because the original granite has weathered and transformed over time, this makes ionic clay deposits easier to mine. Brazil also has other advantages in rare earth mining and processing. For example, while rare earth extraction requires large amounts of electricity and water, Meteoric Resources' mine in Brazil operates entirely on renewable energy and has very low electricity costs, something Australia lacks.

HANH NGUYEN (According to DW, Bloomberg)

Source: https://baocantho.com.vn/brazil-nguon-cung-dat-hiem-moi-cua-the-gioi-a206081.html