Rare Earths: Brazil moves into focus

While China has dominated the global market for rare earths for decades, a new power is emerging on the horizon: Brazil. According to WirtschaftsWoche, the South American country could soon become a serious competitor – with potentially dramatic effects on global supply chains and the prices of these strategically critical raw materials.

The focus is particularly on metals such as dysprosium and terbium, which possess unique magnetic and illuminating properties. Although deposits also exist in Greenland, Canada, and Sweden, these metals are often embedded in hard rock there, which makes extraction more expensive.

The Brazilian mining company Serra Verde will shortly begin commercial extraction of rare earths and is offering them at prices that can compete with those of Chinese producers. The crucial difference: Brazil is considered a more stable and predictable partner, without the geopolitical tensions that accompany Chinese supplies.

“We will sell at the same prices as the Chinese,” Serra CEO Lars-Eric Johansson is quoted as saying. The company has an estimated 2.6 million tons of rare earths in its mine in the state of Goiás and has already signed long-term supply contracts with customers in Europe and the USA.

Brazil’s rise could shake up this balance of power. The country has the third-largest reserves worldwide and benefits from several strategic advantages: The ore deposits contain hardly any radioactive elements, making extraction more environmentally friendly and cost-effective. Moreover, the mine is already fully permitted and is conveniently located between two major highways.

Serra Verde plans to produce 5,000 tons of rare earths this year and increase extraction to 10,000 tons annually by 2025. While China is increasingly restricting its exports to favor its domestic industry, Brazil could become the preferred partner of the West. US companies such as General Motors and MP Materials are already investing heavily in alternative supply chains.

MK