Brazil rare earth mine shows hurdles of breaking free from China

Mining

Aug 31

About $5 billion in US-backed investment and financing is converging on an open-pit mine in the forested hills of Brazil’s central state of Goias, part of Washington’s push to break its dependence on ...

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overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nBrazil rare earth mine shows hurdles of breaking free from China\n</h2>\n\n<h4 class=\"meta\">\n\n\n2026-08-31 10:13 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.mining.com/web/brazil-rare-earth-mine-shows-hurdles-of-breaking-free-from-china/><strong>Mining</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>About $5 billion in US-backed investment and financing is converging on an open-pit mine in the forested hills of Brazil’s central state of Goias, part of Washington’s push to break its dependence on ...</p>\n\n<a href=\"https://www.mining.com/web/brazil-rare-earth-mine-shows-hurdles-of-breaking-free-from-china/\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"CRIT","symbol_name":"Optica Rare Earths & Critical Materials ETF","start_time":0,"source_url":"https://www.mining.com/web/brazil-rare-earth-mine-shows-hurdles-of-breaking-free-from-china/","article_id":"2664832538","we_media_id":null,"thumbnails":["https://www.mining.com/wp-content/uploads/2025/08/aclara-carina-module-rree-brazil.png"],"rights":{"source":"mining_highlight","url":"https://www.mining.com/web/brazil-rare-earth-mine-shows-hurdles-of-breaking-free-from-china/","rn_cache_url":null,"directOrigin":true},"url":"https://stock-news.laohu8.com/highlight/detail?id=2664832538","pubTimestamp":1788142380,"columns":[],"sourceInfo":{"source_id":"mining_highlight","name":"MINING.COM"},"weMediaInfo":null,"summary":"Serra Verde is struggling to increase production and to separate its heavy rare earths, a…","collect":0,"end_time":0,"defaultTopTitle":"mining.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"CRIT":"Optica Rare Earths & Critical Materials ETF","REMX":"VanEck Rare Earth and Strategic Metals ETF","FXZ":"First Trust Materials AlphaDEX Fund","EWZS":"MSCI巴西小盘股ETF-iShares","MVPS":"Amplify Thematic All-Stars ETF"},"translate_title":"巴西稀土矿显示出摆脱中国的障碍","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"MVPS":1.5,"CRIT":0.81,"EWZS":1.5,"FXZ":1.5,"REMX":1.5},"content_text":"About $5 billion in US-backed investment and financing is converging on an open-pit mine in the forested hills of Brazil’s central state of Goias, part of Washington’s push to break its dependence on China for rare earths.\nPela Ema, owned by rare-earth producer Serra Verde Group, is one of the few commercial-scale sources outside Asia of magnetic rare earths used in electric vehicles, wind turbines and defense equipment. That makes it strategically valuable, but far from a straightforward business bet.\nSerra Verde is struggling to ramp up production and to separate its heavy rare earths, a stage of the supply chain largely dominated by China. It also faces political risks in Brazil. While some of its challenges are not unusual for similar projects, together they highlight the obstacles confronting Washington’s push to build a rare earth supply chain outside Beijing’s control.\nPela Ema’s recovery rates for neodymium, praseodymium, dysprosium and terbium — essential to high-performance permanent magnets — were between 20% and 30% during the ramp-up phase, according to a person familiar with the matter, who requested anonymity because the data isn’t public. The same person cautioned, however, that such rates can fluctuate significantly before operations stabilize and are more reliably measured over a longer period of time.\nSerra Verde had initially expected to recover close to 80% of the rare earth content in the ore it processes, the person said. A spokesperson for the company declined to comment on recovery rates. USA Rare Earth didn’t reply to a request for comment.\nIn an April interview with Bloomberg News, Chief Operating Officer Ricardo Grossi said the company is replacing equipment and that US government financing will help fund the upgrades. “We will begin ramping up this new optimized processing route in the third and fourth quarters of this year. The second phase of the optimization will be completed by the second quarter of 2027,” Grossi said.\nSerra Verde has said it expects annual production to reach 6,400 tonnes of rare earth oxides by the end of 2027.\nUnconventional support \nWashington’s support began with a $565 million loan provided in February by the US International Development Finance Corporation to optimize and expand Pela Ema. The more unusual backing came in April, when Oklahoma-based USA Rare Earth Inc., a publicly traded US company that has benefited from extensive government support, agreed to acquire 100% of Serra Verde Group for about $2.8 billion in cash and stock. \n\nUSA Rare Earth boosts Western supply with $2.8B Brazil deal\n\nThe significance lies less in the amount of money than in the broader structure around the deal. Alongside government financing and support for a US buyer, Washington is helping underpin long-term demand and prices for Serra Verde’s output, going beyond the kind of backing typically associated with a mine development project.\nSerra Verde has signed a 15-year agreement to sell 100% of its initial production to a special-purpose vehicle capitalized by US government entities and private investors, with guaranteed minimum prices for its magnetic rare earths.\nIn an Aug. 24 statement, USA Rare Earth said the vehicle has lined up $1.55 billion in funding arrangements, including a $750 million commitment from the US Department of War, $250 million more than originally planned. The US government has separately agreed to buy at least $300 million of rare earth products from the vehicle over five years.\n“The Serra Verde case is the clearest global example of Washington’s more muscular, state-led approach to the sector,” said Bryan Harris, managing partner at Sabio, a Latin America-focused corporate intelligence firm.\nThe intended payoff is a supply chain that extends well beyond the mine. USA Rare Earth says the Serra Verde combination can form part of a mine-to-magnet platform spanning Brazil, the US, France and the UK. Washington has also committed development funding to Aclara Resources’ Carina heavy rare earth project in Brazil, suggesting Pela Ema is a model for a broader push rather than a one-off transaction.\nFrom mine to magnet\nOwning the ore, however, solves only the first part of the problem. Pela Ema processes its material into mixed rare earth carbonate. Its heavy rare earth content then requires a different separation route than the light rare earth feedstock most Western processors are designed to handle, and the US does not yet have a proven commercial-scale route for all of that material.\nThat means some Pela Ema output may have to be stockpiled while non-China separation capacity catches up. Building a new processing plant from scratch could take about three years, according to a person who has developed similar capacity in the US.\nThat downstream gap is where China retains its greatest leverage. In 2025, China or Chinese-controlled firms produced 83% of the world’s rare earth ore and handled 91% of the processing that turns it into usable oxides. In 2024, they made 94% of the world’s rare-earth magnets. China’s 2025 export controls on rare earths and magnets showed how quickly that concentration can become a constraint for Western manufacturers.\nPela Ema itself illustrates the bind. When the mine was being developed, Serra Verde agreed 10-year offtake deals with Chinese companies that could buy and process its concentrate. The company has since shortened those contracts so they expire at the end of 2026, opening more output to Western customers as non-China separation capacity comes online.\nDespite ramp-up problems, “Serra Verde is one of the most relevant projects in the world today for magnetic producers,” said Robert da Silva Ashley, a partner at law firm DLA Piper who advises on energy and natural-resources transactions across the Americas\nPolitical risk\nThe other challenge is in Brazil. The country holds almost a quarter of the world’s estimated rare earth reserves but accounted for less than 1% of global production last year.\nPresident Luiz Inácio Lula da Silva’s government wants foreign capital and technology to develop that resource base, but it is also pushing for more separation, refining and manufacturing to happen inside Brazil, with the goal of moving the country beyond its role as mainly an exporter of mineral feedstock.\nThat policy is becoming more concrete. Brazil’s lower house approved legislation creating a national policy for critical and strategic minerals in May, including incentives for processing and transformation in the country. The measure is expected to go to a vote in the Senate this week. A separate Senate proposal would require at least 80% of the refining of rare earths and other strategic minerals to occur in Brazil. \nThe Serra Verde transaction has also become a test of those sovereignty concerns. Rede Sustentabilidade, a Brazilian political party, asked the Supreme Court to suspend the sale in an ongoing court filing, arguing that Brazil lacks sufficient safeguards over strategic mineral assets. People familiar with the case said they do not expect the challenge to derail the transaction.\nThe minerals push is unfolding as broader US-Brazil ties have become more strained. In July, Washington imposed new Section 301 tariffs on portions of Brazilian exports, and Brazil later requested World Trade Organization consultations over the measures. Beijing, meanwhile, remains Brazil’s largest trading partner, with its exports to China valued at roughly three times those to the US.\nEven with those tensions, Serra Verde is unlikely to be an isolated case as Washington looks further afield for supplies outside China.\n“We will almost certainly see more cases like Serra Verde around the globe — in Latin America, Greenland, Central Asia or elsewhere,” Harris said.\n(By Mie Dahl)","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":false,"editions":null,"column":"","sentiment":"-1","news_tag":"","news_rank":0,"isVideo":false,"video":null,"symbols":[],"gpt_button":0,"need_auth":false,"need_login_tip":false,"code":"91000000","status":"200"}}}