Brazil Rare Earths: US, China & EU Race for Vital Minerals

A global competition for access to Brazil’s substantial rare earth deposits is intensifying, with the United States, the European Union, and China all seeking to secure supplies of these critical minerals. The race reflects a broader effort by Washington and Brussels to lessen their reliance on China, which currently dominates the production and processing of rare earths.

Brazil holds the second-largest reserves of rare earth minerals globally, making it a key target in the escalating geopolitical contest for control of these vital resources. These minerals are essential components in a wide range of 21st-century technologies, including wind turbines, electric vehicles, semiconductors, and defense systems.

The European Union is actively pursuing an agreement with Brazil for joint investments in critical raw materials. European Commission President Ursula von der Leyen discussed this potential partnership during a visit to Rio de Janeiro last month. February 6, 2026, it was announced that Brazil’s export agency will host an event next month where EU-linked investors are expected to announce financial backing for five mining projects focused on rare earths, nickel, lithium, and manganese.

This pursuit of deals places the EU in direct competition with the United States, which has privately signaled its own strong interest in accessing Brazil’s largely untapped rare earth deposits to Brazilian officials and industry representatives. US financial commitment is already evident, with more than half a billion dollars invested in Serra Verde, Brazil’s only currently operational rare earths mine.

The US investment appears to have preempted European efforts. EU Industry Commissioner Stéphane Séjourné reportedly cancelled a planned trip to Brazil late last year to discuss a rare earths mine after learning of the American investment in Serra Verde.

China’s efforts to expand its geographic control over the rare earths supply chain have further fueled the three-way contest between the world’s leading economic powers. At least six mining ventures are currently developing prospects in Brazil, and several have reported being approached by Chinese groups, including investment funds and automotive manufacturers seeking to secure access to these materials.

While lacking the financial resources and speed of the US, the EU is emphasizing its commitment to supporting local employment and processing within Brazil. Terra Brasil Minerals, currently fundraising $500 million for rare earths projects, has stated that investors with strong European ties have been reviewing its business data.

Brazil’s left-leaning government, led by President Luiz Inácio Lula da Silva, has expressed a desire to develop a domestic rare earths refining industry, rather than simply exporting raw materials. This ambition aligns with a broader push for greater national control over its natural resources.

A US official stated that “friendshoring makes sense” and indicated openness to an agreement with Brazil, suggesting that the country could become a valuable ally in diversifying the rare earths supply chain.

The increasing geopolitical tensions surrounding trade and natural resources present a complex challenge for Brazil. Analysts suggest that the country will likely face pressure from the United States to limit Chinese influence in the rare earths sector. However, Brazil’s relatively limited trade exposure to the US may allow Brasília to navigate these pressures and pursue a balanced approach.

Mario Braga, a risk intelligence analyst at Rane, noted that Brazil’s substantial mineral potential is likely to allow for the presence of companies from the US, Europe, and China within its territory.

Beijing’s recent restrictions on exports of certain rare earths, particularly heavy rare earths like dysprosium and terbium, have underscored the strategic importance of diversifying supply sources. These heavy rare earths are crucial for high-temperature magnets used in electric vehicle motors, wind turbines, and robotics, and their availability has become increasingly constrained following Chinese export cuts last year.

One executive involved in rare earths exploration in Brazil, speaking on condition of anonymity, indicated that Chinese companies are particularly focused on securing access to heavy rare earths. However, several projects in the country have expressed a preference for working with Western customers.

Rafael Moreno, CEO of Viridis, an Australian company developing rare earth assets in Brazil, stated that the company made a “strategic decision to follow a western supply chain” which has proven beneficial. John Prineas, executive chair at St George Mining, echoed this sentiment, stating that the US is “more likely to be our strategic partner.”

Serra Verde initially entered into an agreement to sell the majority of its output to China, but subsequently amended the contract to expire this year. This shift reflects a growing desire to diversify its customer base and align with Western partners.

As Western nations seek to establish processing facilities for rare earths, they are actively seeking feedstock from countries like Brazil. Meteoric Resources, a Brazilian rare earths venture, has signed non-binding agreements to supply Neo Performance Materials, which operates a magnet facility in Estonia, and Ucore Rare Metals, which is establishing a processing plant in the United States.

EU officials are also aiming to finalize an agreement with the US on critical minerals within the next month, with the goal of coordinating their efforts to secure access to these essential resources.

Rare earths projects in Brazil have attracted approximately $700 million in equity and debt funding over the past two years, with a significant portion of this investment originating from Western sources, including London-listed precious metals group Hochschild, private investors, and wealthy individuals. Export banks from Australia, France, the US, and Canada have also expressed interest in providing financing.

In 2024, China invested $556 million in Brazil’s overall mining sector, according to the Brazil-China Business Council.