Brazil Poised to Diversify Rare Earth Supply

Brazil is emerging as a potential counterweight to China’s near-monopoly on rare earth elements (REEs), offering an alternative source and processing capacity for materials critical to the energy transition and defense technology.

China currently accounts for about 69% of global REE output, processes 90% of those ores and nearly 99% of heavy REEs, and controls much of the magnet manufacturing chain. Brazil holds an estimated 22 million tons of REE reserves versus China’s 44 million tons but supplies under 2% of global production.

Progress is visible: Brazil’s first commercial REE mine, Serra Verde, began production in 2024 after lengthy permitting delays, and the national development bank BNDES has committed nearly $1 billion to critical mineral development. Dozens of projects, many partnered with international firms, aim to build not just mining but midstream refining and downstream manufacturing capacity.

Key obstacles remain: slow bureaucracy, licensing and logistics, and the risk that U.S. trade measures could complicate bilateral industrial cooperation. Overcoming these hurdles will require streamlined permitting, targeted industrial policy, international financing, and investment in refining capacity.

If Brazil can move rapidly up the value chain, it could stabilize supply, reduce geopolitical leverage from a single supplier, and offer more environmentally prudent extraction and processing options for global markets.