US Aims to Process Critical Minerals in Brazil to Strengthen Supply Chain

The US aims to process critical minerals in Brazil, signaling stronger cooperation to secure strategic supply chains. Caleb Orr confirmed active negotiations with Brazilian authorities to expand downstream capabilities. The initiative focuses on heavy rare earths essential for magnets and advanced technologies.

Brazil hosts immense reserves of critical minerals, including rare earths, niobium, graphite, lithium, and nickel. Despite this, it contributed less than 1% of global rare earth production in 2024. The US seeks to finance projects through its Development Finance Corporation to develop processing capacity and encourage local industrialization.

Recent DFC-backed projects include Serra Verde and Aclara in Goiás. Serra Verde plans to reach 6,500 tonnes/year of rare-earth oxides by 2027. Aclara aims to come online in 2028 with a ramp-up into 2029, focusing on dysprosium and terbium, key materials for high-performance magnets.

US Aims to Process Critical Minerals in Brazil Amid Strategic Partnerships

The US aims to process critical minerals in Brazil as part of a broader Western supply chain strategy. Negotiations emphasize financing, technical cooperation, and trade agreements. Brazil’s sophisticated economy could facilitate US-led processing if regulatory approvals allow.

President Luiz Inacio Lula da Silva encourages foreign investment that includes downstream facilities. Brazil seeks industrialization of its critical minerals, ensuring economic benefits remain domestic. As a result, US companies must commit to local processing to access resources.

Brazil’s vast reserves position it as a potential global leader in critical minerals. The US has already signed cooperation agreements with Argentina, Ecuador, Paraguay, and Peru, creating a regional network for lithium, copper, and rare earths. Heavy rare earth projects in Brazil complement these partnerships.

Processing Capacity Key to Brazil’s Critical Minerals Strategy

Processing capacity remains Brazil’s top priority for critical minerals development. Despite rich reserves, fiscal incentives and industrial policies lag behind global competitors. The newly formed Brazilian Critical Minerals Association (AMC) highlights the need for downstream investments to compete with other countries’ midstream facilities.

End-to-end value chains could boost local economies and strengthen strategic supply chains. Investors and policymakers view Brazil as a critical hub for battery materials and advanced magnet production. Heavy rare earth projects backed by the US could catalyze broader industrialization efforts.

SuperMetalPrice Commentary:

US plans to process critical minerals in Brazil signal a strategic shift toward securing Western supply chains. Heavy rare earths like dysprosium and terbium are critical for advanced technologies. Brazil’s insistence on local industrialization ensures economic benefits while attracting US investment. Commodity markets should monitor project timelines, as new processing capacity could influence global rare earth pricing and midstream investment trends.