Brazil rare earth deal proves militaries’ long-held interest in minerals

In 1939, the United States introduced the term "critical minerals" through the Strategic and Critical Materials Stock Piling Act, defining these materials as essential for military and industrial needs during national emergencies. As the definition expanded over the decades, discussions on critical minerals today primarily focus on their role in the energy transition, such as wind turbines, electric cars, and batteries.

However, a recent deal involving rare earth minerals highlights that the historical significance of these minerals for the military remains relevant.

In late August, the US Department of War announced a $750 million investment to secure supplies from the Serra Verde rare earths mine in Goiás, central-west Brazil. This mine produces dysprosium, terbium, neodymium, and praseodymium, four of the 17 rare earth minerals. Roughly half of global rare earth supplies are used in permanent magnets, which are vital components in wind turbines, electric vehicles, fighter jets, missiles, and drones.

The convergence of the global energy transition and military interests has become increasingly obvious, especially considering the ongoing tensions between the US and China.

Phil Johnstone, a visiting fellow at the University of Sussex in the UK, explains that while sustainability goals grew alongside a perceived era of peace, the current landscape has transformed, making critical minerals a more pressing concern. Brazil's Serra Verde mine, which started commercial production in 2024, aims to produce 6,400 tonnes of rare earth oxides annually by the end of 2027, making it the first "scale" producer of the four main rare earths outside Asia.

These rare earth elements are 17 heavy metal chemical elements crucial for modern technologies, with similar but unique chemical and physical properties. For instance, gadolinium is used in nuclear power reactors, while scandium is employed in vehicle fuel cells. Rare earth elements are key ingredients for various modern technologies, including electric vehicle batteries and stainless steel.

The increased interest in these materials reflects the growing security concerns that are shaping US foreign policy in Latin America and beyond.

China's dominance in critical minerals processing, with 91% of refined rare earth output and 94% of sintered permanent magnets, poses a strategic vulnerability for the US. This dependence on Chinese-made magnets and technologies for military hardware is a significant concern, particularly given the ongoing tensions between the US and China.

For Latin American countries, this renewed US interest in natural resources presents a dilemma, as they balance the potential benefits of increased trade with China against the geopolitical risks.