Brazil at the Centre of the Global Rare Earths Power Struggle

Brazil has become the focal point of an intensifying geopolitical contest over rare earths, with the US, EU, and China racing to secure access to the country’s vast reserves. These minerals are essential for clean energy, defense, and advanced manufacturing, yet global supply remains heavily dominated by China. Holding the world’s second-largest reserves, most of them still underdeveloped, Brazil has emerged as a strategic prize at a moment of rising trade tensions. Washington and Brussels are seeking to reduce their dependence on Chinese supply chains, while Beijing is moving to preserve its influence by expanding its footprint in Brazil’s mining sector. Brasília, meanwhile, is navigating this three-way rivalry while pursuing its own economic and industrial priorities.

The race on the ground: projects, money, and diplomacy

At least six rare earths projects are under development in Brazil, and together the sector has secured roughly $700mn in equity and debt funding in recent years, largely from western sources. The United States has already committed more than $500mn to Serra Verde, Brazil’s only operational rare earths mine, giving it a clear early advantage.

The European Union is pursuing joint investment agreements with Brazil and hopes its recently signed trade deal with the Mercosur bloc will strengthen its hand, even as European officials concede they cannot always match the speed or scale of US financing. China, meanwhile, has approached several Brazilian ventures through investment funds and industrial groups, and continues to invest heavily in Brazil’s wider mining sector.

Strategic tensions and Brazil’s balancing act

Competition has intensified following China’s restrictions on exports of certain rare earths, particularly heavy elements such as dysprosium and terbium, which are vital for electric vehicle motors, wind turbines, and robotics. Western governments are racing to secure feedstock for planned processing facilities, while several Brazilian projects have opted to prioritise western supply chains.

For Brazil, the surge of interest promises economic gains but also diplomatic complexity. Analysts warn that Brasília is likely to face pressure, particularly from Washington, to curb Chinese influence. However, Brazil’s relatively low trade exposure to the US provides it with room to resist such pressure and maintain a diversified set of partners.

Industrial strategy and domestic ambitions

Beyond geopolitics, Brazil’s government has signaled a desire to move up the value chain. President Luiz Inácio Lula da Silva’s administration wants to foster a domestic rare earths refining and processing industry, creating jobs and retaining more value at home rather than exporting raw materials. The EU has sought to differentiate itself by emphasising local employment, processing, and long-term industrial partnerships.

Implications for the global minerals industry

Brazil’s rare earths sector is becoming a test case for supply chain diversification and “friendshoring.” Its development could weaken China’s dominance, accelerate the build-out of western processing capacity, and reshape investment patterns across Latin America. For mining companies, manufacturers, and governments alike, Brazil’s choices will influence the resilience of clean-energy supply chains and determine whether resource-rich countries can successfully leverage geopolitical competition to advance their own industrial ambitions.