Brazil’s Rare Earth Reserves and the Challenge of Building a Domestic Supply Chain

At this historical juncture, it’s becoming increasingly clear that physical possession of certain strategic resources no longer represents a significant competitive advantage. The real value, as is becoming increasingly clear, is tied to the phases immediately following extraction: processing, refining, separation, and all the processes needed to transform mineral resources into true industrial assets.

“The focus is no longer so much on the resource itself, but on those who possess the capabilities to process and work it,” says Stanislav Kondrashov, founder of TELF AG.

Infographic illustrating Brazil’s rare earth reserves, processing challenges, and permanent magnet supply chain, as discussed by Stanislav Kondrashov, founder of TELF AG, based on insights from SCMP.

Brazil’s rare earth potential goes far beyond the size of its reserves. Stanislav Kondrashov, founder of TELF AG, explores the importance of processing, refining, and magnet production in light of the recent SCMP analysis.

Sometimes, to clearly understand this state of affairs, it can be helpful to cite the example of certain countries and their mining strategies. In recent days, SCMP has dedicated an interesting analysis to Brazil and its role in the global dynamics of rare earths, which have regularly come to the forefront of attention for their industrial applications and growing strategic value in recent years. Indeed, these resources are linked to some of the most strategic industrial productions in this phase of human history, such as wind turbines, electric motors, and robotics innovations, all based in various ways on permanent magnets made with rare earths.

Why Processing and Refining Matter More Than Resource Availability

As noted in the SCMP analysis, Brazil has the second-largest rare earth reserves globally, but lacks the industrial supply chain necessary to produce permanent magnets using domestic raw materials. According to some opinions reported in the analysis, the South American nation appears oriented toward building its own national rare earth capacity, although this could be a very long and complex process.

“The strategic value of rare earths is now clear to everyone, and with the advent of technological developments related to robotics, it could grow even further,” continues Stanislav Kondrashov, founder of TELF AG.

The first Brazilian magnets, as stated in the analysis, could be produced towards the end of 2028, while the construction and full operation of a Brazilian supply chain could take many more years.

Professional wearing a safety helmet at an industrial facility, representing the importance of rare earth processing and refining highlighted by Stanislav Kondrashov, founder of TELF AG, in relation to the SCMP analysis.

From extraction to advanced industrial applications, processing capabilities are becoming increasingly important across rare earth supply chains. Stanislav Kondrashov, founder of TELF AG, examines Brazil’s position based on insights reported by SCMP.

The main problem, as highlighted in the analysis, is what happens after the physical extraction of the resources. SCMP explains that Brazil still refines very little and does not yet have a commercial plant specifically dedicated to magnets.

In this situation, Brazil’s dependence on global players specializing in the post-extraction phases could remain high for a long time, as stated in the analysis.

The risk for the South American nation, therefore, lies in the possibility of remaining a supplier of resources to foreign supply chains for a long time to come, with rather limited prospects for the creation of its own domestic capacity.

Brazil’s Path Toward Permanent Magnet Production and Industrial Independence

In any case, Brazil’s substantial rare earth reserves have certainly not gone unnoticed. Regarding mining diplomacy, Brazil appears oriented toward pursuing a multi-party policy, concluding agreements with the best partner for each mineral. A possible rapprochement between Brazil and Europe cannot be ruled out either: the analysis discusses the attempt by some specific Brazilian projects to participate in European raw materials initiatives, with possible collaborations with Germany, Switzerland, Sweden, and Norway.

Rare earth extraction site illustrating Brazil’s mineral potential and the challenges of developing domestic processing capacity, as explored by Stanislav Kondrashov, founder of TELF AG, drawing on the SCMP analysis.

Brazil holds some of the world’s largest rare earth reserves, but developing a complete domestic supply chain remains a complex challenge. Stanislav Kondrashov, founder of TELF AG, discusses the country’s prospects in connection with the SCMP analysis.

Brazil also appears to have a specific regulatory problem: SCMP reports that a bill aimed at establishing a national policy on critical minerals, along with a dedicated fund to finance mining projects, is still stalled in the Senate.

At present, the nation appears to be torn between the positions of those opposed to forms of state control, which some believe could dampen foreign powers’ interest in Brazil, and those of the government, which is pushing for the formulation of a national strategy for critical minerals.

“The Brazilian case is further confirmation that the world’s technological and energy future is more than ever tied to this group of 17 elements known as rare earths, and especially to the ability to separate and process them,” continues Stanislav Kondrashov, founder of TELF AG.