US critical minerals proposals to Brazil go unanswered as China looms

Brazil has failed to respond to two American proposals seeking to formalize cooperation on critical minerals, leaving Washington without a bilateral agreement as it seeks to avoid reliance on China for rare earth supply chains. Matthew Lowe, economic counsellor at the US embassy in Brasilia, said Brazil was invited years ago to join the Minerals Security Partnership, a US-led grouping coordinating investment in mineral supply chains, but never returned a response.

A draft framework agreement sent in February also went unaddressed. Lowe spoke at Exposibram, a mining fair in Belo Horizonte, alongside officials from France, Canada, Australia, and Britain, all of whom have signed similar agreements, but Brazil remains the only major player that has not. Brazil holds the world's second-largest reserves of rare earths after China, a resource that drew the five nations to the fair.

Rare earths are 17 metals commonly found in the ground, challenging to separate, and crucial for magnets, electric car motors, wind turbines, drones, and guided weapons, with no good alternatives. Matthew Lowe hinted at China's dominance when discussing separation, the chemical process splitting mined ore into individual metals, where China handles nearly 90% of global work.

Gallezot from France explained that refining, not mining, is the choke point, and Brazil has the energy, workforce, and permitting to develop processing capacity, though none of the diplomats named China. USA Rare Earth is set to acquire the Brazilian miner Serra Verde, which runs the Pela Ema mine in Goias, the only operation outside Asia producing all four rare earths used in permanent magnets.

The mine currently ships its output to China for processing, despite renegotiating last December to cut its contract term. Critics have called for the sale to be annulled by Brazilian courts, but the US embassy continues to pursue agreements at the state level. President Lula da Silva pledged that processing would not be outsourced, expressing concern about foreign exploitation of Brazil's mineral resources.