Brazil's Strategic Move to Domesticate Rare Earth Processing

Brazil is positioning itself to reshape the global rare earths market by requiring foreign partners to process rare earth minerals domestically as a condition for accessing its reserves. Leonardo Durans, a senior official at Brazil’s Ministry of Industry, emphasized that while Brazil is open to investment from the United States, the European Union, and China, the focus will be on domestic technological development and job creation. Brazil holds approximately 10% of global critical mineral reserves, including the second-largest reserves of rare earths and graphite.

South China Morning PostBrazil could gain a “new Petrobras” focused on rare earths if the bill is approved, and the state-owned company would be based in Brasília with the mission of industrializing minerals that the countryBrazil's Terrabras Initiative: A State-Owned Rare Earths Strategy Amid China's Increasing Restrictions

In line with this strategy, Federal Deputy Rodrigo Rollemberg has introduced Bill 1.733/2026, proposing the establishment of a state-owned company named Terrabras (Brazilian Rare Earths S.A.). This entity aims to explore, industrialize, and market strategic minerals, thereby reducing Brazil's reliance on imports and enhancing its position in the global market. The proposed company would operate throughout the rare earths value chain, from exploration to commercialization, and is modeled after Petrobras, Brazil's state oil company.

Brazil could gain a “new Petrobras” focused on rare earths if the bill is approved, and the state-owned company would be based in Brasília with the mission of industrializing minerals that the countryBrazil's Terrabras Initiative: A State-Owned Rare Earths Strategy Amid China's Increasing RestrictionsThe government may create a state-owned company rival to Vale in Brazil to explore rare earths, which are highly sought after by the USA and China due to their significance in today’s global technolog

Terrabras would serve as a facilitator between the federal government and private sector, coordinating investments and developing industrial hubs for processing rare earths. The project aims to create skilled jobs and promote technological innovations, moving Brazil from being a raw material exporter to a competitive player in the value-added market of processed minerals. Unlike Petrobras, the proposed model does not mandate state ownership in private companies, which may ease political approval.

Brazil could gain a “new Petrobras” focused on rare earths if the bill is approved, and the state-owned company would be based in Brasília with the mission of industrializing minerals that the countryThe government may create a state-owned company rival to Vale in Brazil to explore rare earths, which are highly sought after by the USA and China due to their significance in today’s global technologBrazil's Terrabras Initiative: A State-Owned Rare Earths Strategy Amid China's Increasing Restrictions

The establishment of Terrabras is seen as crucial for Brazil's economic development and technological sovereignty, especially as global demand for rare earths intensifies. The U.S. and other nations are investing heavily to reduce dependence on China, which currently dominates over 60% of global rare earth production. Brazil's untapped reserves present a strategic opportunity for both economic gain and resource security.

Brazil's Terrabras Initiative: A State-Owned Rare Earths Strategy Amid China's Increasing RestrictionsBrazil could gain a “new Petrobras” focused on rare earths if the bill is approved, and the state-owned company would be based in Brasília with the mission of industrializing minerals that the country

Despite the potential benefits, the proposal faces significant hurdles. Developing a rare earths sector requires substantial investment, with estimates suggesting that major projects could need around 3.5 billion reais (approximately $650 million) in upfront capital. Additionally, environmental and social concerns complicate the landscape, as many mining applications overlap with rural settlements and protected areas, raising the risk of land conflicts.

Brazil's Terrabras Initiative: A State-Owned Rare Earths Strategy Amid China's Increasing Restrictions

Bill 1.733/2026 is currently under discussion in Brazil's House of Representatives, where lawmakers will debate various aspects, including initial capital, corporate governance, and production targets. The geopolitical context favors the bill's approval, but the upcoming elections add urgency and complexity to the legislative process. The outcome will determine whether Brazil can emerge as a leader in the strategic minerals economy or remain a peripheral player.

Brazil could gain a “new Petrobras” focused on rare earths if the bill is approved, and the state-owned company would be based in Brasília with the mission of industrializing minerals that the country

• “Our doors of Brazil to foreign investment are open, but our position has matured,” — Leonardo Durans, Senior Official, Ministry of Industry

South China Morning Post

• “The justification for the project argues that the goal is to reduce external dependence and prevent the country from remaining merely an exporter of raw materials with low added value.” — Rodrigo Rollemberg, Federal Deputy

The government may create a state-owned company rival to Vale in Brazil to explore rare earths, which are highly sought after by the USA and China due to their significance in today’s global technolog

While Brazil holds significant reserves of rare earths, its current contribution to global production is minimal, at just 1%. This disparity highlights the challenges of transitioning from resource abundance to active production. The legislative progress of Bill 1.733/2026 remains uncertain, with no recent updates on its status in Congress.

Brazil's Terrabras Initiative: A State-Owned Rare Earths Strategy Amid China's Increasing Restrictions