São Paulo, February 12th (Argus) - US Assistant Secretary of State Caleb Orr stated at a press conference held later on Wednesday that the US is interested in developing key mineral processing capabilities in Brazil and is actively negotiating with the Brazilian authorities on this matter.
Orr said at the Zoom press conference that the US regards Brazil as a "significant" partner for establishing a resilient Western critical mineral supply chain and is exploring methods to establish processing capabilities in the country through its Development Finance Corporation (DFC). At the press conference, Latin American media focused on the critical minerals ministerial conference held in Washington D.C. last week.
"Brazil has extremely rich reserves of natural critical minerals," Orr said, but he hinted that the US is concerned about rare earths.
DFC recently supported the Serra Verde and Aclara rare earth projects in the Goiás state of Brazil. Serra Verde achieved commercial production in 2024, but with DFC investment, it is expected that the rare earth oxide production will increase to 6,500 tons per year by 2027. Aclara plans to start production in the second half of 2028 and reach full production in 2029.
Both companies produce or plan to produce a mixed rare earth carbonate, which contains a higher proportion of heavy rare earths, especially dysprosium and terbium, which are key raw materials for permanent magnet materials.
Orr said: "The US is already providing funds for some of Brazil's rare earth projects." Orr focused on economic, energy and business affairs. "I think this is an important step in helping and encouraging the processing of rare earth minerals."
Orr said that the US is actively negotiating with Brazil on critical mineral processing and pointed out that Brazil's diversified economy and maturity will "enable" the US to carry out processing in the country. However, Brazil still needs to allow the US to develop mineral processing within its territory.
Orr avoided answering questions about whether this would become a topic during President Luiz Inácio Lula da Silva's visit to the White House in March, but he acknowledged that the US's approach on this issue requires "a strong partnership".
Orr said: "We hope to reach a great trade agreement including critical minerals with Brazil. We believe that Brazil's participation in the critical minerals ministerial conference held last week is a crucial step towards this goal."
According to data from the Brazilian Geological Service SGB, Brazil has the world's largest reserves of niobium, the second-largest reserves of rare earths and graphite, and the third-largest reserves of nickel and the sixth-largest reserves of lithium.
The US has signed important mineral cooperation agreements with Argentina, Ecuador, Paraguay and Peru. At the press conference, Orr also emphasized that Argentina is an important partner for copper and lithium projects.
Brazil hopes to increase processing capacity
As several market participants and President Lula himself have pointed out, processing is the top priority in Brazil's key mineral industry.
Despite having the world's leading reserves of key minerals, Brazil's potential in this field has not been fully exploited. For instance, by 2024, Brazil's share of global rare earth production was less than 1%.
President Lula is willing to allow foreign companies to develop Brazil's important mineral reserves, provided that they also invest in building downstream facilities and establish an end-to-end value chain within Brazil.
"We will not become an exporter of key minerals," Lula said in a speech last November. "If foreign companies want to develop them, they must industrialize in our country so that our country can make money."
Lula's call for the industrialization of the mining industry also aligns with the ideas of market participants in the key mineral sector, especially in the area of battery materials. Lithium miners have called for the introduction of incentive policies to promote the end-to-end supply chain - the newly established AMC association for key minerals in Brazil has agreed to this.
"Brazil has the ability to become a world-leading country in key minerals, but it lacks the fiscal incentives to do so," Marisa Cesar, the chairperson of AMC's board, told Agence France-Presse.
