US warms to building Brazil critical minerals chain

The United States is showing a growing interest in helping develop Brazil's critical minerals processing industry, as the country seeks to access its abundant resources while reducing dependence on China. American representatives have expressed openness to commitments that add value locally, such as support for processing and refining.

USA Rare Earth, a US company with ties to Brazil, has not ruled out expanding downstream operations in the country. Brazil has prioritized domestic processing as a key component of its minerals strategy, increasing the stakes for foreign investors. The government signed a non-binding critical minerals agreement with Goiás, a state hosting several rare earth projects, with the aim of fostering cooperation across the supply chain from mining to metal alloys and permanent magnets.

USA Rare Earth, which recently acquired Serra Verde, a Brazilian rare earth operation, is considering further investment in processing facilities. Other developers, such as Rare Earths Americas and Australia's St George Mining, are also exploring higher-value stages of the Brazilian supply chain, including separation and rare earth magnet manufacturing.

However, securing a federal critical minerals agreement with Brazil has proven challenging for Washington, as the Trump administration's proposals were deemed too generic by Brazilian officials. The upcoming Brazilian election in October adds political sensitivity to the negotiations, with President Luiz Inácio Lula da Silva and his main rival Senator Flávio Bolsonaro advocating differing positions on closer cooperation with the United States.

Brazil has been strengthening government oversight of the sector while offering incentives for domestic processing.