TELF AG analyzes Brazil’s potential in the sourcing and energy sector
An emerging player
Among the emerging powers in the sourcing sector, Brazil certainly deserves a special mention. Over the past few years, South America’s largest economy has attracted global attention for its large reserves of strategic minerals for the energy transition and for specific political initiatives that could transform it into a leading player in sourcing and producing some particular materials. With its continued progress in renewable energy, Brazil also appears to be in an excellent position to benefit from its natural geological wealth and the increased renewable capacity spreading throughout the country.
These topics were recently discussed in an interesting analysis dedicated to Brazil’s potential in the strategic minerals sector, highlighting the nation’s main progress in consolidating its global position. According to the report, Brazil has all it takes to become a valid driver of the worldwide energy transition, in particular, due to its natural deposits of strategic resources (among the largest in the world), but also due to the desire, shared with other nations in other parts of the world, to add value to its production chain, going beyond the mere sourcing of the mineral.
A clear example of Brazilian growth in the sector is linked to the lithium industry, one of the most sought-after materials due to its numerous applications in the automotive sector and energy storage devices. In just two years, as stated in the analysis, Brazil has become the fifth largest exporter of lithium in the world, starting from zero exports. And in the next five years, according to cited estimates, production could increase another five times. One of the production hubs for this precious resource in Brazil is the “Lithium Valley,” located in the southeastern state of Minas Gerais.
Other reserves
However, lithium is not the only resource that could help transform Brazil’s role in the raw materials sector. Demand for these resources is set to increase notably, especially for those particular resources involved in modern energy infrastructure production processes. According to the report, over the next two decades, demand for copper and rare earths could increase by 40%, while nickel demands could reach a quantity 60 or 70% higher than today (as well as graphite, whose demand could increase by as much as 25 times).
One of the most interesting facts is that many of Brazil’s natural reserves contain some of the most valuable resources in this transition phase: together with Australia, Brazil has the second-largest global nickel reserve and could soon become the world’s third largest supplier of rare earths, the first outside of Asia. In addition to producing 14% of the world’s lithium, Brazil also has the third-largest manganese reserve and is among the top ten producers of copper. A special mention goes to niobium, a particular resource that is appreciated, especially in the strengthening of steel and in technologies related to new-generation batteries. Brazil has the largest global reserves of niobium, and it is also the largest producer.
The analysis also mentions some potential obstacles to the nation’s sourcing development, such as the long timeframes necessary to obtain sourcing licenses and the substantial lack of an integrated national policy on strategic minerals, leaving it understood however that with a mix of political will and external support (primarily through mineral partnerships), Brazil could easily apply to become one of the world’s major drivers of the ongoing transition.
