TEMPO.CO, Jakarta - There is a new rush for resources taking shape in Brazil. But this time, it is not about gold, coffee or rubber. Instead, the focus is on the gold of the artificial intelligence and renewable energy era: rare earths.
"The next big, rare earth projects in the world will be in Brazil," the geologist Andrew Tunks, CEO of the Australian mining company Meteoric Resources, told DW. "I don't know how long it will take," Tunks said, "but I think in time [Brazil] will compete with China."
Meteoric is investing heavily in rare earth mining in Brazil. Its so-called Caldeira project, located in the state of Minas Gerais, is believed to be the world's largest ionic clay deposit.
Ionic clay deposits are among the most important sources of "medium" and "heavy" rare earths, such as dysprosium and terbium, which are essential for the high-performance magnets used in wind turbines and electric vehicles.
Rush for rare earth reserves
According to the International Energy Agency (IEA), "demand for magnet rare earth elements (neodymium, praseodymium, dysprosium and terbium) has doubled since 2015 and is set to expand further by a third by 2030 under today's policy settings, thanks to growing electrification and the rapid deployment of new energy technologies such as EVs and wind turbines."
The IEA says growing demand for automation, robotics and digital technologies will further boost the need for rare earths, which are essential for electric vehicles, AI data centers and advanced robotics.
Brazil holds the world's second-largest rare earth reserves after China, with estimated deposits of around 21 million tons. China remains far ahead, topping the global ranking with 44 million tons.
Rising global demand for rare earths has triggered an explosion in mining applications at Brazil's National Mining Agency (ANM). There are currently 2,758 projects under consideration.
For comparison, just over 250 applications for rare earth mining were filed in Brazil between 1975 and 2020. Between 2023 and 2024 alone, that number surged to 1,662.
U.S. company takes over Brazilian mine
Brazil's new "gold rush" is also being felt on the stock market. Share prices of companies investing in rare earth mining in the country have soared. Over the past 12 months, stocks in Meteoric (Australia), Resouro Strategic Metals (Canada), Appia Rare Earths and Uranium Corp (Canada), and USA Rare Earths (US) have risen between 65 percent and 122 percent.
In April, USA Rare Earths acquired Brazil's only active rare earth mine from the Brazilian mining company Serra Verde in Minacu, in the state of Goias, for $2.8 billion.
"Serra Verde's Pela Ema mine is a one-of-a-kind asset and the only producer outside Asia capable of supplying all four magnetic rare earths at scale," CEO Barbara Humpton said after the takeover.
She pointed to the mine's strategic importance, highlighted by a 15-year supply agreement with several U.S. government agencies.
According to the German-Brazilian Chamber of Industry and Commerce in Sao Paulo, German companies are still only "selectively" involved in raw materials extraction in Brazil.
Germany is nevertheless seeking to expand its partnerships with Brazil in areas such as critical minerals, energy transition, green industry and supply chain security, Bruno Vath Zarpellon, head of business development at the chamber, told DW.
Can Brazil compete with China?
Serra Verde remains an exception in Brazil's rare earth sector. Unlike China, Brazil has so far largely limited itself to exporting raw materials instead of processing and refining them domestically.
According to the International Energy Agency (IEA), China now accounts for more than 90 percent of global rare earth refining capacity. It also dominates the production of permanent magnets, holding a market share of around 95 percent.
The electronics industry felt the impact of this dependence last year. After China imposed export controls on rare earths during its tariff dispute with U.S. President Donald Trump, supply shortages followed.
Brazil — along with other resource-rich countries such as India, Vietnam, Sweden and Norway — now wants to build its own rare earth value chains. But Meteoric CEO Andrew Tunks says that will take time.
"Brazil could become competitive relatively quickly in mining," Tunks said. "But when it comes to manufacturing, it will still take some time."
Easier extraction of deposits in Brazil
From a geological perspective, Brazil has an advantage over other countries with large, rare earth reserves. According to the Brazilian Geological Society (SBG), around 73 percent of the country's deposits consist of ionic clay formations.
"These are deposits where nature has already done part of the processing work," explained Francisco Valdir Silveira, head of the SBG. "The original granite rock has already been altered or weathered over time. That makes ionic clay deposits easier to mine."
Geologist and mining entrepreneur Tunks sees additional advantages to rare earth extraction and processing in Brazil.
"Separation requires a lot of electricity and water. Our mine in Brazil runs entirely on renewable energy, and electricity is cheap," Tunks said. "You simply don't have that in Australia. It's very dry there and electricity is very expensive."
Tunks hopes Brazil's "gold rush" will take a different path from the one seen in his home country.
"In Australia, we extract massive amounts of raw materials and just send them to China," he said. "We don't create any added value from them. I hope Brazil can do better."
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