The huge crater alongside a small town in the interior of Brazil has all the elements to solve the West to find rare critical metals – vital for the construction of electric vehicles, wind turbines, guided missiles and robots.
Inaugurated last year, and it is the only mine outside Asia that produces significant amounts of some of the most difficult rare metals to find.
With China controlling most rare metals and now strategic metals amid an intensification of trade war, the US government revealed last month, which wants to finance the mine’s expansion in Brazil.
But there is an obstacle. The mine is already hired to sell its rare metals to China.
“They were the only client who could process the product and separate it,” said Thras Moraitis, CEO of the company behind the mine, Serra Verde. “An insightful planning of the Chinese over many decades has put them in a position where they have very strong control.”
The mine in Brazil exposes that when it comes to vital minerals for the economy and the battlefields of the future, the West is very late and has few good options to recover.
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China dominates mining and rare land processing, a collection of 17 elements essential for automotive, semiconductor, aerospace and defense industries. Although abundant in the earth’s crust, they are difficult to extract and separate, and the United States and other Western nations have largely left this work for China.
For some “heavy” rare lands-nominated because they have higher atomic numbers in the periodic table-China is essentially the only country that can separate and process them.
The rare lands have become so coveted because they help manufacture the powerful magnets needed for new cars, missiles and drones. Although “light” rare lands represent a much larger part of these magnets, heavy rare lands are also needed to prevent magnets from weakening or destroyed at high temperatures.
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The heavy rare lands have come predominantly from Minas Gerais in China and Myanmar, which sell their production to their powerful neighbor, because these countries have natural clay deposits rich in the elements.
But recently, governments and industry have been excited to realize that another country – Brazil – also has an abundance of such clay deposits.
“I analyzed 600 to 700 projects around the world, and in my opinion, Brazil has by far its best access to heavy rare lands,” said Constantine KarayanNopoulos, a rare land pioneer that co-founded one of the largest companies in the sector, the neo performance in Canada. “Brazil can be the watershed.”
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In 2010, China interrupted rare land exports to Japan due to a territorial dispute, raising alarms that the world depended on China for these critical minerals. That same year, Denham Capital, a Boston Private Equity firm, has invested in a nascent project called Serra Verde to mine these minerals in Brazil.
Eight years later, the project was still trying to take off and Serra Verde sought buyers willing to compromise. There was essentially just a potential customer. Virtually no one outside China could extract the heavy rare lands from the elemental sludge that Serra Verde intended to sell.
“You can dig,” said Karayannopoulos. “But nowhere in the West is there an existing capacity to catch this material and produce separate discretion and tilde.”
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After 14 years – and an additional investment of US $ 150 million of American and British investors – Mina Serra Verde was inaugurated last year in Minaçu, Brazil, a city of 30,000 in downtown Brazil, built around an asbestos mine with decades of existence. Everything Mina extracted was already hired to go to China.
MoraItis, CEO of Serra Verde, which is legally based on Switzerland, did not provide details of the contract, but said that the vast majority of his company’s product was committed to China until at least 2027. The company expects to have enough production to start accepting new buyers.
Other rare land producers are in a similar situation.
MP Materials, a company based in Las Vegas and partially funded by the Pentagon, miner and mainly separates light rare land in Mountain Pass, California. However, in a record of securities last year, the company said it sold 80% of its product to China.
A MP Material spokesman said the company has reduced its sales to China as it can separate more on its own. It sells the separate rare lands to buyers in Japan and South Korea, as well as the US national defense stock. MP Materials cannot yet separate heavy rare lands, but is building another Pentagon -funded plant in California.
This joins other efforts throughout the West to separate heavy rare land, including in France and Estonia. These plants will probably take a few years to be built, said Moraitis, but when they are ready, finding heavy rare lands must still be difficult.
Serra Verde expects to produce a few hundred tons of heavy rare land by 2027, which, according to Moraitis, would double the offer of elements outside Asia. (The existing offer comes from small amounts extracted from existing mines, including as a byproduct of coal and uranium.)
Other heavy rare land mines in Brazil are years away. A project in France, announced this year, plans to extract heavy rare lands of recycled batteries.
Moraitis said that since China has restricted its rare lands this month, governments and industry have made calls. “There is a greater sense of urgency in these discussions,” he said.
Now everyone wants the rare lands of Serra Verde, he said, but they are going to China.
“It’s really hard not to admire what they have been able to achieve,” Moraitis said about China. “And it’s very difficult to compete against it.”
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