A United States steel helicopter carrying a team of geologists, after landing in a remote area of the Amazon rainforest, found a large deposit of iron ore in 1967. It was the Carajas region, one of the world’s richest regions in minerals. The situation today may seem less outlandish than an Indiana Jones movie scenario, but a similar mining partnership between the United States and Brazil may form again, this time centered around the base minerals that drive modern geopolitics. As the governments of Donald Trump and Luis Inacio Lula da Silva seek to reconcile their vocal differences, the development of strategic minerals – especially rare earths – is emerging as an uncharted territory of mutual interest. What are rare metal magnets? Why did you enter the trade war? China’s move to shore up its dominance of the rare earth supply chain in response to Washington’s tariffs – extending restrictions on its exports of essential components for everything from semiconductors to defense systems – has opened the door to potential producers including Brazil, Australia and India. While the United States has an ambitious – and unconventional – plan to rebuild its domestic mining sector, as my colleague Liam Denning recently explained, Washington will need as much support as possible from its allies if it intends to challenge China’s near-absolute dominance. This is where Brazil comes into play: it is already a global mining power, geographically close to the United States, and contains the largest reserve of rare earths in the world after China. A strategic opportunity for Brazil Brasilia has been talking about an important minerals strategy for decades, but to little avail. A strategic alliance with the United States, the country’s largest foreign investor, could give it momentum through joint projects, purchase and financing agreements or strategic deals. Along with some efforts, this issue is likely to come to light when Brazilian Foreign Minister Mauro Vieira meets his US counterpart Marco Rubio in Washington this week, paving the way for the first bilateral meeting between Trump and Lula. Lula could use the rare earth card as a bargaining chip to remove the steep 50% tariffs Trump announced in July, taking advantage of the president’s renewed desire to do business with Brazil. Besant expects a sweeping global backlash against China’s new restrictions on rare earths. It would be a deal that both sides could tout as a victory, especially given its implications for US national security. But the left-wing leader must tread carefully: his Nationalist Labor Party, ever suspicious of any real or imagined hint of imperialism, will not tolerate any exploitative arrangement similar to what many saw in Trump’s previous deal with Ukraine. To alleviate these concerns, Lula could push for the development of domestic refining and magnet production capacity, an idea that aligns with his government’s industrial policy ambitions and was reportedly floated with the Biden administration before Trump returned to power. Lola can revive her now. For the United States, any additional supply chain that challenges China’s dominance is a win; Even if it was developed abroad. It would also help confront Brasilia’s relationship with Beijing, its main trading partner and destination for most of its raw materials and goods. Brazil has reserves, not production. At the same time, cooperation with the United States could give Brazil the incentives and critical mass needed to start its rare earth industry. Despite its large reserves and many encouraging projects, Brazil’s production of rare earths is still almost non-existent. “We are lagging behind in a sector that is now at the heart of a global battle,” Fernando Landgraf, a critical minerals expert and professor at the University of São Paulo, told me. “China is closing its market, and the United States is making big investments at home… It would be very interesting if the United States showed interest in a rare earths refining joint venture in Brazil that adds more value here.” Trump’s move away brings Brazil and China closer in search of new markets. Brazil also offers a key advantage to US investors: despite its complex bureaucracy and strict regulations, it remains an open destination for foreign capital, including in strategic sectors. Brazilian branches of American companies can qualify for financing from the National Development Bank BNDES, which is currently seeking to support 56 projects focused on strategic minerals. The success of Latin America’s largest economy in developing other minerals essential to the energy transition (including nickel, copper, graphite and lithium) adds to its credibility. Niobium: Brazil’s global lead Then there’s niobium: Brazil accounts for around 90% of global production, and is key to the stronger, lighter steel alloys used in everything from turbines to smartphones. Brazil launches billion-dollar package to support companies affected by Trump’s tariffs One private Brazilian company, CBMM, controlled by the family of billionaire Moreira Salles, dominates niobium production after decades of building a new supply chain, underscoring the country’s enormous potential in these industries. In 2011, a Chinese group and a Japanese-South Korean alliance each bought a 15% stake in CBMM, putting them in a strategic position years ahead of any American competition. Of course, mineral diplomacy is only one of several topics expected to be on the bilateral agenda, many of which are controversial, including the situation in Venezuela, the expansion of BRICS, the unrest in Haiti, and Brasilia’s tough policies against Big Tech and ethanol. But the opportunity is there. Trump would not seize this opportunity, if not for ideological affinity. They may even do it simply because it makes perfect business and strategic sense.
Juan Spinito: Brazil could overtake China in race for rare earths
