Brazil’s Rare Earths Need Industrial Policy
12/29/2025, 8:05:28 PM | China | South America
Brazil’s rare earth reserves require sustained industrial policy and midstream capacity to achieve strategic value and diversify supply chains.
A new study by Manuel Mindreau argues Brazil’s rare earth reserves will remain strategically marginal unless policy drives value-chain development beyond mining.
Mindreau reviews Brazil’s stop‑start approach from 2010–2025—Rousseff-era industrial initiatives, a deregulatory Temer/Bolsonaro interval, and the Lula III mission-driven relaunch—and finds repeated policy discontinuity has pushed the country back toward raw‑material exports.
The strategic bottleneck is downstream: separation, refining, oxide and metal production, and magnet manufacture, where China holds de facto monopoly. Those midstream steps are capital‑intensive, environmentally sensitive, and commercially risky, so private capital avoids them without coordinated state support.
To turn geology into leverage, Brazil needs three linked pillars: a processing build‑out (separation to magnet precursor), stable governance and institutions that outlast electoral cycles, and anchored demand via domestic or allied industrial procurement.
For Western partners, pragmatic engagement should prioritize value‑chain integration—joint ventures, technology transfer, co‑financing, and long‑term offtakes—rather than simple ore purchases. Mindreau’s qualitative policy analysis stresses that without sustained industrial policy, Brazil risks becoming a new ore spigot feeding existing processing monopolies rather than a diversification partner.
The study flags policy implementation, ESG backlash, and China’s pricing power as key risks to watch.