Brazil Set To Challenge China's Dominance in Rare Earths Industry

Western countries have long been trying to break China's dominance of the supply chain and rare earth minerals. Brazil may be the answer as the South American mining giant is pushing to challenge Chinese dominance and build its own rare earth industry as the demand for metals needed for magnets used in green energy and defense is rising.

Brazil is seen to take advantage of its low labor costs, clean energy, established regulations, and proximity to end markets such as the United States and Mexico in order to achieve this goal. It is also planning to build Latin America's first magnet plant which would provide a ready buyer for these rare earth metals.

However, Reuters noted that this would still be a huge challenge to Brazil, nonetheless. This is because of several factors, including the low prices rare earth minerals have, along with technical challenges and nervous lenders. Still, Brazil wants to become one of the world's top five rare earths producers.

The country currently holds the world's third-largest rare earth reserves and with the pace of its rare earths projects, experts note that this would be a "test for how successful the West may be at building a new advanced industry almost from scratch to break China's grip."

Despite this, investors are looking at this development very positively, with Daniel Morgan of Barrenjoey Investment Bank in Sydney stating, "Brazil as a source of potential rare earths is a very exciting proposition because there have been some very meaningful discoveries made in the past couple of years."

"I do think outside of China, Brazil's projects are the most economic greenfield projects available," he added.

However, this would be a long-haul project as many other countries are looking to catch up to China, including Australia, Vietnam, and Brazil. Continued support would be needed to break Chinese dominance in the industry.

Brazil Coordinating With Neighbor French Guiana To Fight Illegal Mining

Meanwhile, Brazil is also looking to stamp down on illegal mining, and it is looking to its French neighbors for help after Lula and French President Emmanuel Macron met on the sidelines of the G7 meetings in Italy.

French Guiana is still part of France and much like its larger neighbor, Brazil, it is also rich in minerals. However, also like Brazil, it also has a massive illegal mining problem. This is where the two countries aim to work together and drive out illegal mining.

"Brazil and France signed an agreement to combat threats to security and the environment, and health risks affecting the cross-border region," said the Brazilian government in a statement.

Canada Cracking Down on Rare Earth Metals from China

It is not just Brazil that is challenging China's dominance on rare earth minerals, but also Canada, as the North American country has announced a crackdown against companies selling rare earth minerals mined in Canada but sold to Chinese buyers.

The crackdown against Chinese rare earth minerals was led by Justin Trudeau himself, and this is leading the Canadian government to buy stockpiled rare earth materials from Vital Metals Ltd. to stop them from selling to a Chinese buyer.

This article is owned by Latin Post.

Written by: Rick Martin

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