Brazil is poised to launch South America's first rare earth (RE) magnet plant later this year — CIT SENAI ITR, formerly known as Lab Fab, in Minas Gerais state — marking a key step forward in diversifying supply chains outside China. Brazil's rare earth deposits can potentially provide a significant amount of local feedstock, if successfully developed in the coming years, but the lasting success of the country's nascent magnet sector will heavily depend on strategic priorities, willingness to provide government incentives and investor appetite.
Argus spoke with Jose Luciano Pereira, technology and innovation manager at CIT SENAI ITR, about how the project is progressing and plans to carve out a competitive position. The plant is scheduled to start operations later this year, with initial capacity to produce 100 t/yr of permanent magnets, making it the first facility of its kind in the southern hemisphere capable of producing such a volume.
Edited highlights follow. This interview has been translated from Portuguese.
Do you have enough rare earth materials to cover requirements during your pilot production phase? You have just been to China to secure more feedstock for the facility — was it a successful trip?
We did succeed as suppliers are willing to send us material. We have secured enough material for our initial production. China has no selling restrictions.
What types of magnets do you plan to produce?
We will initially produce neodymium iron boron magnets. But given we have a development laboratory, we expect to produce magnets from other rare earths as well.
Are you in conversation with any potential buyers or offtakers for the magnets?
There are many companies that are interested in working with us. We have already talked with more than 20 companies from different sectors.
Furthermore, we have an alliance between SENAI and companies that plan on securing the complete cycle of rare earth magnet production in Brazil.
Today, the rare earth market is completely controlled by China in terms of processing material — the country leads the market. But there are movements to change that.
You recently sealed a deal with ASX-listed Meteoric Resources to supply raw materials to the facility. What does this deal mean to the project?
[The deal and the production] will show that Brazil is capable of producing at scale, encouraging investors to want to create their production sites in Brazil.
Do you think Brazil is able to establish itself as a major rare earth magnets supplier? What does the country need to do to become an important participant in this industry?
[The country] has the natural resources, enough knowledge and capacity to transform and process rare earths in the country. And it has enough conditions to produce value-added products.
SENAI's programme aims to show that Brazil can develop and process minerals with a degree of purity, whether that's to produce rare earth magnets or to produce batteries. This is a strategic endeavour to avoid the country just selling the unprocessed commodity.
But whether this production will be leveraged and developed to an industrial scale [….] that depends on the development of the country. If the government place enough policies to encourage production, if the development bank will finance companies [….] and if the country will be able to produce magnets at a price that can compete with China. It will depend a lot on the question of market strategy. How to compete with the Chinese price.
We [currently] lack greater incentives for projects to get off the ground, to establish national production.
