Brazil’s rare-earth push is drawing attention from firms based in the United States and China. That is putting a spotlight on a problem Brazil has had for years. The country has struggled to move from owning minerals to making those minerals into local processing, tech, and products.
A new proposal is at the center of the latest news. China’s Gulf Resources, which is listed on Nasdaq and is known for bromine and crude salt, would team up with Brazil’s Montes Verdes Participações. The plan is to form a joint venture. Montes Verdes would bring its mineral assets in Brazil and its exploration rights. Gulf Resources would bring its know-how.
What the venture would target was described in broad terms. It is said to include gold, manganese, lithium, bromine, and rare-earth minerals. Still, key details were not shared. The companies did not publish the deal price. They also did not say how ownership would be split, or what the financial terms would be. Montes Verdes is not yet a mining operator. It is in the exploration stage. Gulf Resources has also been linked mainly to the Chinese market. For those reasons, the plan looks more like a first step to diversify than a plan to run a working mine right away.
This could matter for another reason. Chinese firms do not often say out loud that they want to explore rare earths in Brazil. China leads much of the rare-earth supply chain, especially refining and making permanent magnets. Most other firms that have been involved in Brazil’s rare-earth space have tended to be from Australia, Canada, or the United States.
Even so, the path ahead is not clear. Having exploration rights does not mean there are proven reserves. To reach production, a project would need more work. It would require mapping the area, prospecting, feasibility checks, and environmental approvals. It would also need roads, power, and other infrastructure. On top of that, the deposits would have to show that mining would pay off. Even if everything goes well on timing, the jump from early exploration to actual output takes time and depends on many steps.
U.S. bid for Serra Verde
In Goiás, the deal is drawing attention because the risks feel more concrete. USA Rare Earth will buy the Serra Verde Group for about $2.8 billion. The offer will be paid in cash and shares. It still depends on approval from shareholders and regulators.
Serra Verde works on the Pela Ema project in Minaçu. This site sits on a big ionic-clay deposit. Production started in 2024. That came after more than $1.1 billion was put into the project.
A U.S. Department of War announcement in August said a further $750 million investment would support an offtake agreement for mixed rare-earth carbonates from Pela Ema. The department said the amount forms part of a broader $1.55 billion financing structure, which also includes a $300 million purchase commitment from the Defense Logistics Agency and a $500 million commitment from a major bank.
USA Rare Earth expects Serra Verde’s first phase to reach nameplate capacity by the end of 2027, producing about 6,400 metric tons of total rare-earth oxide equivalent annually. The company projects annualized EBITDA of $550 million to $650 million at that stage, based on sales of separated oxides.
The transaction would give a U.S. company control of one of the few non-Asian operations producing all four magnetic rare earths at scale. It would also support a mine-to-magnet supply chain outside Asia, an objective shared by Washington and other governments seeking to reduce dependence on China.
Why rare earths matter
Rare earths include 17 elements. This set is made up of 15 lanthanides plus scandium and yttrium.
People sometimes call them “rare,” but that name is a bit misleading. In the rock record, some of them show up fairly often in the Earth’s crust. Still, the kind of deposits that make money are not common. The elements are spread out, not locked away as pure materials. Also, many of them share close chemical traits, so separating them is hard work. It takes special methods and costs more than you might expect.
The International Energy Agency reports that permanent magnets make up roughly 95% of rare-earth use by value. It also notes that demand for the four magnet-linked elements, neodymium, praseodymium, dysprosium, and terbium, has climbed to about double what it was in 2015. Under today’s policy settings, that demand may rise by another 30% by 2030. The report points to electric cars, wind generation, automation, robotics, and digital systems as key drivers.
In 2024, the same agency says China produced around 60% of the world’s mined magnet rare earths. It also produced about 91% of refined output. For sintered permanent magnets, China held about 94% of production.
The supply route covers more than the mine. It starts with extraction and concentration. After that comes chemical treatment, then separation into individual oxides. The chain continues with metal refining, then alloying, and finally magnet making. Some of the hardest technical steps, and the parts that add the most value, are often located away from the mine site.
Brazil’s opportunity and policy gap
Brazil is often said to have the world’s second-biggest rare earth reserves after China. Still, published figures differ. Reasons include how the term is defined, how much is known about the geology, and updates to government data. Part of the country has not been mapped in full. Some deposits, such as ionic clays, may also be easier to extract than others.
Even with this geology, Brazil has not built a full home-based value chain. The country is strong in mineral supply. It is weaker in other steps, like separating the elements, refining them, making alloys, and producing permanent magnets. If Brazil ships mixed concentrates or raw material, it would keep less know-how. It would also take a smaller cut of the profit that comes from later industries.
Because of the proposed purchase of Serra Verde, people in Brasília have been arguing about the rules. The question is whether those rules let the federal government review foreign control of key mineral assets. In the deal as described, a U.S. firm would buy the operator of the mine. It would not buy the mineral resources themselves. Brazil’s Constitution says mineral resources in the ground belong to the Union. Mining firms work under licenses, concessions, and legal duties to regulators.
Brazil’s Chamber of Deputies said yes in May to a plan for a national framework covering critical minerals and rare earths. The bill still needs approval from the Senate.
If passed, the plan would set up a council. That council would pick which minerals count as critical or strategic. It would also look at some mergers and certain contracts. In addition, it would help new efforts move forward using a credit guarantee fund.
The proposal also includes tax credits worth about 5 billion reais. Those credits would target processing and transformation inside Brazil. It would also speed up environmental licensing.
Supporters say the goal is to pull in private investment. They also want to lower the chance that projects fail due to big upfront costs, hard permitting steps, and price swings.
Still, some critics do not trust a market-only route. They argue that tax breaks alone may not be enough. They point to the United States, China, and India. Those countries can offer far more public money to lock in supply chains. They can also fund new processing work in their own countries.
Brazil may not have to bar foreign firms. But it likely needs clearer rules for key sectors. Such rules could cover work done locally, research ties, training programs for workers, and sharing technology. Another path could be a state-backed mining or industrial company. It could team up with foreign players and still keep a Brazilian share in the value chain.
Brazil’s key issue is this: will it keep exporting mostly raw goods, or will it use its reserves to build plants and research, along with stronger processing and manufacturing?
For a place with real rare-earth potential, but not much in the way of midstream infrastructure, the gap matters. Getting ore out is not the same as making magnets. That step could shape whether outside interest turns into a local industrial push, or if it stays just another round of selling raw materials.
