Hidden under clay and rock layers, Brazil has a wealth that much of the world wants: millions of tons of minerals needed to build drones and robots, electric cars and guided missiles.
For years, Brazil and the United States discreetly discussed how investment and US assistance could help their South American partner unlock these vast reserves of rare land, the second largest in the world.
But now, the diplomatic crisis between the two largest nations of the Western hemisphere threatens to disrupt the US efforts to ensure access to Brazilian rare lands.
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By weakening China’s dominance over strategic minerals crucial to the economies and battlefields of the future, both nations could benefit from this alliance, according to current Brazilian authorities and former US employees.
American support could help Brazil become a global power in rare land extraction and processing. And Brazilian rare lands could reduce China’s American dependence, which controls about 90% of the world’s supply-and has already shown to be willing to retain them.
The conversations about this alliance, which had not been released before, were at an early stage. So the rare lands of Brazil were suddenly involved in the bitter commercial dispute between the two countries that broke out last month.
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Wear
Ties between Brazil and the United States worn out when President Donald Trump imposed 50% tariffs on the country to help his political ally, former Brazilian president Jair Bolsonaro, who faces criminal accusations for conspiring a blow.
Just before the tariffs were imposed on Brazil, the US signaled that access to Brazilian strategic minerals should be part of commercial negotiations. President Luiz Inacio Lula da Silva reacted, accusing the US of threatening the country’s sovereignty.
“No one puts on,” Lula said last month, referring to Brazil’s critical minerals. “This country belongs to the Brazilian people.” Brazilian authorities have also made it clear that they will now seek to explore their rare land reserves with other allies, such as India.
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“With Brazil, we were knocking on the open door,” said José Fernandez, a former state department official. “I don’t know if this will turn against us, but it certainly won’t help.”
Brazil is believed to have between 19% and 23% of global rare land reserves, a group of 17 elements necessary to manufacture powerful magnets used in various products, from electric cars and wind turbines to missiles and fighters.
Chinese domain
For decades, China, which has 40% of rare land reserves, has dominated the global supply chains of these minerals, which are abundant in the earth’s crust, but difficult to extract and separate. The West has left China the hard work of mineing, processing and refining rare lands on magnets imported by the US and other countries. For some rare lands, China is practically the only country capable of separating and processing them.
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But other countries have been cautious about China’s dominion. Beijing has cut off the supply to Japan in 2010 and is now retaining some critical minerals and US magnets in response to tariffs. To reduce its dependence on China, Pentagon has invested millions in a Las Vegas mining company, MP Materials, becoming its largest shareholder.
Brazil emerged as perhaps the most promising challenger to Chinese monopoly. It has reserves of about 21 million tons, although it can take years to produce significant amounts of minerals.
“There is still much to be explored, to be studied,” said Inácio Melo, CEO of the Geological Service of Brazil. “Brazil has enormous potential.”
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For now, only a Brazilian mine, partially supported by US investors, is producing small amounts of minerals, which still need to be sent to China for processing. But Brazil has ambitious plans to build a domestic supply chain that covers mines, processing plants and magnet factories.
Until recently, the US had been helping Brazil to approach its goals. Biden administration officials made at least five visits to the country between 2022 and 2024, according to Fernandez, who attended some meetings.
Brazil’s main focus on these discussions was to guarantee US technical assistance and investment, Fernandez said. “Brazil was a very willing partner,” he added.
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During a visit by the State Department last year, American officers seemed interested in the first Brazilian laboratory where rare lands will be transformed into magnets and the country’s ability to eventually provide the Pentagon, according to Eduardo Neves, researcher of the installation that attended the meeting.
“They wanted information about if we are already selling magnets, how long it will take to produce,” he said. “They looked very interested.”
Last year, US and British investors invested $ 150 million in the first rare lands of Brazil, Serra Verde, as part of an initiative supported by the US government.
In the months after Trump takes office, the main American diplomat in Brazil, Chargé d’Affaires [encarregado de negócios] Gabriel Escobar met with the Brazilian Mining Association to discuss a possible partnership on rare land minerals, according to Raul Jungmann, president of the group.
Then, in July, two weeks after Trump threatened Brazil with high tariffs, Escobar requested another meeting, according to Jungmann.
“The first time, he was more concerned with partnerships,” said Jungmann. The second time, the tone was more insistent, he added. “He made it very clear, very explicit, US interest in strategic critical minerals.”
In Brazil, a country sensitive to foreign interference in its resources after decades of ups and downs in commodities such as rubber and sugar, American interest in rare land became headline and generated anger and distrust.
Fares cool conversations
After the tariffs came into force and commercial negotiations were paralyzed, some Brazilian officers adopted a more conciliatory tone, signaling opening to place the rare lands on the negotiating table.
Commercial negotiations between Brazil and the US has since stagnated, with Brazil accusing Trump of ignoring their attempts to negotiate and Trump insisting that the country remove the lawsuit against Bolsonaro, which many in Brazil see as a central to protect national democracy.
Last week, tensions increased when Trump accused Brazil of being a “bad commercial partner.” Lula countered, pointing out that his country has a commercial deficit with the US. “We are still willing to negotiate, but Brazil will not kneel before the United States.”
Brazil now seems to move on in large part without the US. He is studying his deposits with the help of a Spanish mapping company and working to improve their processing capabilities through a public-private partnership supported by more than two dozen companies and research groups around the world.
The rates about Brazil were softened by hundreds of exceptions, but the rare lands were remarkably absent from the list.
This would make US companies reluctant to invest in the rare lands of the country, according to Sergio Fontanez, former government counselor and president of the US Export and Import Bank, a government credit agency.
“There is an opportunity for us there,” said Fontanez. “But what you are essentially creating now,” he added, “it’s an embargo on American companies.”
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