The US is interested in developing critical minerals processing capacity in Brazil and is in active negotiations with Brazilian authorities to do so, US assistant secretary of state Caleb Orr said in a press conference late Wednesday.
The US sees Brazil as an 'essential' partner in building a resilient Western critical minerals supply chain, and is actively exploring ways to build processing capacity in the country through financing from its Development Finance Corporation (DFC) and technical cooperation, Orr said during the Zoom press conference with Latin American media focussed on last week's critical minerals ministerial meeting in Washington, DC.
"Brazil has immensely rich natural critical minerals reserves," Orr said, but the US is focused on heavy rare earths, he signaled.
The DFC has recently backed both the Serra Verde and Aclara rare earth projects in the Brazilian state of Goiás. Serra Verde achieved commercial production in 2024, but is expected to increase rare-earths oxide production to 6,500 metric tonnes (t)/yr by 2027 following DFC's investment. Aclara is scheduled to come on line in the second half of 2028, with ramp-up throughout 2029.
Both firms produce — or aim to — a mixed rare earth carbonate with an elevated proportion of heavy rare earths, especially dysprosium and terbium, which are key feedstocks to rare earth magnets.
"The US is already financing some [heavy rare earths] projects [in Brazil]," said Orr, whose focus is economics, energy and business affairs. "I think it's a natural next step to help encourage processing."
The US is in active negotiations with Brazil on critical minerals processing, Orr said, noting that its diversified economy and sophistication would "enable" the US to conduct processing in the country. Brazil, however, would still need to allow the US to develop mineral processing in Brazilian territory.
Orr deflected questions regarding whether this would be a topic during Brazil's president Luiz Inacio Lula da Silva's trip to the White House in March, but acknowledged that the US's approach on this matter required "strong partnerships."
"We want to get to a great trade deal with Brazil that includes critical minerals," Orr said. "We view Brazil's participation in last week's critical minerals ministerial meeting as a key step forward toward that goal."
Brazil has the world's largest niobium reserves, ranking second in rare earths and graphite reserves, third in nickel, and sixth in lithium, according to the Brazilian geological service SGB.
The US has already signed critical minerals cooperation agreements with Argentina, Ecuador, Paraguay and Peru. During his press conference, Orr also highlighted Argentina as a key partner for copper and lithium projects.
Brazil wants to add processing capacity
Processing is a top priority for Brazil's critical minerals industry, as noted by several market participants and president Lula himself.
Despite having world-leading reserves of critical minerals, Brazil's potential in this field remains largely untapped. It accounted for less than 1pc of global rare earths production in 2024, for instance.
President Lula is willing to allow foreign companies to explore the country's critical mineral reserves, provided they also invest in building downstream facilities that establish an end-to-end value chain within Brazil.
"We are not going to be exporters of critical minerals," he said in a speech last November. "If [foreign companies] want [to explore] them, they will have to industrialize in our country so that our country can earn that money."
Lula's call for mining industrialization echoes appeals from market participants of the critical minerals industry, especially on the battery materials front. Lithium miners have asked for incentive policies to push for an end-to-end supply chain — and Brazil's newly founded critical minerals association AMC agrees.
"Brazil is in a position to become the world's leading critical minerals player, but it lacks the fiscal incentives to do so," [AMC's board president Marisa Cesar told Argus](https://direct.argusmedia.com/newsandanalysis/article/2759016). "This leads to other countries offering more favorable economics for midstream and downstream plants than Brazil."
