Brazil, which holds nearly a quarter of the world’s rare earth metal (REM) resources, remains only a nominal player on the global market. Despite an estimated 21 million tonnes of rare-earth oxides in the ground, the country’s actual contribution to global supply is still below 1%.

Brazil’s main advantage is ion adsorption clays. Unlike hard-rock deposits, the rare-earth elements in these clays are weakly bound, which in theory promises lower CapEx and simpler extraction. The Serra Verde project has already showcased the commercial viability of this idea and has become a driver of national exports.

However, a technological monopoly in Beijing stands in the way of Brazil becoming a “rare earth superpower.” Meanwhile, China controls:

* 69% of unseparated oxide production;

* 100% of heavy rare earth separation capacity;

* The overwhelming share of high‑tech magnet and alloy manufacturing.

The structural trap for Brazilian firms lies in how value is distributed along the supply chain. Mining concentrate typically captures only 10–20% of the final product price. The main margins sit in separation and refining (40–50%), and in magnet manufacture (30–40%).

Without its own processing capacity, Brazil is forced to remain a supplier of cheap feedstock, effectively subsidizing Chinese refining.

Beyond the lack of processing technology, the industry faces a severe credit shortage. Unlike many Western jurisdictions, Brazilian law does not allow mining licenses to be used as collateral. That makes local players critically dependent on foreign capital.

State institutions such as BNDES and Finep have launched support programs for strategic minerals, but high entry barriers exclude most junior companies.

Brazil’s geological potential is undeniable, but experts warn that resources alone do not guarantee the status of an alternative supplier. Until the country presents an integrated national strategy that links mines to downstream metallization plants, the “rare earth breakthrough” will remain a statistical anomaly in US Geological Survey reports.