Brazil Critical Minerals 2027: Rare Earths, Lithium, Copper

Leonor Caminos (00:00):
Brazil has always been synonymous with mining, especially iron ore. However, the Brazilian mining map is beginning to change. The energy transition, electrification, and above all, the need to diversify the supply chain are putting other strategic minerals at center stage. To address this topic, we welcome you to a new podcast from Industrial Info Resources.
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My name is Leonor Caminos. I am Assistant VP for the Oil Refining industry in Latin America, and today I am joined by my colleague Renzo Castillo, Assistant VP for the Metals and Minerals industry, who leads research in the region. Welcome, Renzo.

Renzo Castillo (01:56):
Thank you very much Lolo for the invitation.

Leonor Caminos (01:56):
Renzo, how important is the industry, the mining industry in Brazil and where is it or how is it positioned currently?

Renzo Castillo (02:07):
Brazil is undoubtedly one of the mining powers in the region and also has a very important weight globally. In fact, if we look specifically at the project portfolio, we track at Industrial Info, Brazil is positioned today as the third mining market in Latin America, only behind Argentina and Chile. Currently, we record in the country more than $54 billion in investments that are distributed across 700 projects.
Then, if we analyze how investment is distributed in Brazil, we notice that it is still very concentrated in the states of Minas Gerais, Pará and Bahia. Together, these three states represent more than 70% of the mining investments we have surveyed in the country. In the state of Minas Gerais alone, we concentrate investments of more than $19 billion.
Now, as you were saying, talking about mining in Brazil is inevitably talking about iron ore mining. Brazil is currently the world's second largest iron producer, and to gauge its importance, in 2024, Brazil produced about 16% of this mineral worldwide. Now, the country doesn't just participate in mineral extraction. It has a developed production chain that includes the stages of beneficiation, concentration and pelletizing, supplying both the steel industry and the export market. According to Industrial Info data, iron ore continues to be, by a wide margin, the main investment segment. Accounting for more than 40% of the total portfolio.

Leonor Caminos (03:28):
Historically in iron production, Vale has always been a leading company. Is this still the case? And besides iron, do you see momentum toward other minerals?

Renzo Castillo (03:41):
Vale remains, without a doubt, the main player in Brazilian mining. To give you an idea of its scale, the company produced nearly 328 million tons of iron ore in 2024, and it's projected that by 2026, this production will reach 335 or 345 million tons of iron ore. But the production of Vale or Vale scale, goes far beyond just the extraction or its production. Vale maintains a very active investment portfolio, where we currently record more than 70 projects in Brazil alone.
And these projects aren't just focused on seeking new production, but are also aimed at both expanding their capacity, developing new mining areas, as well as incorporating greater automation, more digitalization, and new technologies to improve operational efficiency. And on the other hand, moving toward meeting the stages, the decarbonization goals. Among some of the projects we follow, we can mention the development of Carajás or Serra Norte, or the capacity expansions of very large infrastructures such as Serra Sul or S11D, and various other projects that Vale includes, such as grinding, beneficiation, and general operational improvements.
Now, Vale isn't the only relevant player in the country. We also find significant investments from companies like CSN Mineração or Cedro Mineração, which seek to expand their operations and increase their production levels. And precisely all these trends are being driven by different factors that you mentioned at the start of this podcast, such as the energy transition. So we're starting to see a greater shift in the composition of the Brazilian portfolio. A greater presence of projects linked to copper, nickel, lithium and niobium is starting to gain weight within the matrix. But above all, we're seeing very rapid growth in rare earths.

Leonor Caminos (05:29):
And these changes aren't just due to Brazil's geological potential, but to a broader shift in global demand, which places Brazil in a strategic role for those economies looking to secure their supply chains.
And you mentioned lithium, because when we talk about lithium, we automatically think of Argentina, Chile, and Bolivia.

Renzo Castillo (05:42):
Right. On one hand, Brazil has an interesting opportunity precisely because this new global demand is expanding on the map toward critical minerals. Today, the major economies and industries are looking to secure access to raw materials that are fundamental for developing new technologies. And this is where these critical minerals we're discussing come in, which are necessary for producing electric vehicles, hybrid vehicles, energy storage systems, as well as for improving electrical grids, producing advanced electronics, and various strategic applications. So beyond just talking about commodities, we're talking more and more about supply security and industrial development.
And that's where the country has conditions that can take advantage of this trend. On one hand, very important mineral resources, and on the other are highly developed mining industry infrastructure, operational experience, and a growing project portfolio. In copper, for example, Brazil doesn't have the same production history as neighboring countries like Peru or Chile, but it does have a very significant geological base. In the Industrial Info portfolio, we already see more than $4 billion in investments in this mineral. Unlike the countries in the lithium triangle, where most of their resources are associated with brines, Brazil obtains lithium mainly through hard rock, especially from pegmatites containing spodumene. And this has once again allowed the state of Minas Gerais to establish itself as a lithium hub, not just for iron, but to consolidate as a mining hub within the country.

Leonor Caminos (07:12):
And in this landscape you're showing us regarding Brazil's interest in promoting rare earth projects, how concentrated is this chain in China today?

Renzo Castillo (07:17):
Well, China continues to hold a dominant position globally, but that concentration is even higher when we move into the refining stages. According to the International Energy Agency, in 2024, China accounted for about 91% of global refining of rare earths used for magnets. And this rises to 94% for the production of sintered permanent magnets, which are of global interest today. So for the United States and other nations, the challenge is no longer just finding new mines outside of China, but building alternative supply chains that can move toward producing materials with higher added value. And that need became even more evident following the restrictions that China began to apply to certain rare earth products precisely.

Leonor Caminos (08:02):
The transition process from extraction to refining is clear. Is there any action being taken on this yet?

Renzo Castillo (08:08):
The case of Mineração Serra Verde, the owner of the Pela Ema rare earth mine in Goiás, is probably the best example in Brazil today of this new structure. In April of this year, the company was acquired by USA Rare Earth. But at the same time, something even more significant happened from a supply chain perspective. In August, a 15-year purchase agreement for minerals in Serra Verde's production was finalized, backed directly by the United States. The announced financial structure reaches $1,500,000,000 and includes US public investment, bank financing, and a purchase commitment of at least $300 million in rare earth products. This shows us that interest is no longer just about geology or a geological interest, but that there are capital agreements, offtake agreements, and industrial policy behind these projects.

Leonor Caminos (08:59):
And that brings up another question, because in Latin America, investments and developments are often driven by government actions. Is there interest from the government or public agencies in Brazil to promote the development of rare earths?

Renzo Castillo (09:09):
Yes, that intention clearly exists both from the private sector and from the Brazilian government sector. There are initiatives aimed at keeping a larger part of the value chain within the country and not limiting it just to the extraction and export of the mineral. A concrete example we have today is an initiative promoted by the National Bank for Economic and Social Development, which, together with Finep, are making 5 billion reais available in instruments to support projects related to strategic minerals and their industrial transformation. The goal is precisely to boost investments that allow for progress beyond extraction, incorporating processing stages and the development of higher value added products.
Now, moving toward those stages also involves significant challenges. In particular, these types of facilities, specifically rare earth refining, will require a greater volume of water, higher energy demand, new specific technologies for waste treatment, and also a more extensive environmental licensing process. So these new challenges don't just affect the mining sector, but also open up opportunities for other industrial sectors that will support the construction of these projects.

Leonor Caminos (10:17):
If we summarize or recap what you've been telling us so far, we see that Brazil has the mining experience, it has the resources, there are major national companies, there's a presence of foreign capital and international investment, and there are public policies seeking to support project development. So looking ahead, what do we see at Industrial Info for the rest of 2026 and into 2027?

Renzo Castillo (10:46):
Looking ahead to 2027, I think it's important to note that most projects in Brazil's mining portfolio are currently in the planning stage and, to a lesser extent, in the engineering and construction phases. So when we look at the pipeline for 2027, we identify about 330 projects with forecasted construction start dates in this period, provided that their original schedules are maintained. And this analysis goes hand in hand with what we've been discussing today. Where in the structure of these investments, iron continues to carry significant weight by a wide margin. But within this portfolio, we also see potash projects, rare earths, and minerals linked to ferroalloys like niobium or tantalum, which reinforces this trend of Brazil having a much more diversified matrix.

Leonor Caminos (11:27):
And from Industrial Info, there's an interesting point because these investments cannot be analyzed in isolation. And when we see what's starting to happen in other industries, these fairly clear connections begin to appear in the face of this new demand for minerals.

Renzo Castillo (11:38):
Exactly. And it's important that Industrial Info lets us observe and analyze how other industries connect with the mining industry. Particularly in Brazil, we're seeing new investments in sectors that directly or indirectly will drive the demand for minerals. On one hand, we have a growing interest in the automotive industry, especially with new investments linked to the construction of electric and hybrid vehicles, as well as new investments in battery manufacturing and battery storage systems. In addition, there's the demand we discussed at the beginning of our conversation about improvements in electrical grids and the electrification processes needed across all industries. So this generates an internal demand on top of the global demand for all critical minerals. And that's where the investment circle starts to close a bit.
At Industrial Info, we observe not only the evolution of mining projects, but also how those investments connect with new industrial needs within the country. That's why, looking toward 2027, Brazil's opportunity isn't just about increasing its mining production or project portfolio, but also about developing an increasingly integrated industrial chain around those minerals.

Leonor Caminos (12:52):
And I think this is a very good point to close on, because Brazil, on one hand, has a very strong traditional mining base led by iron. But at the same time, it's starting to diversify its matrix toward other critical minerals. The challenge will be, I think, to see how many of these projects finally reach the construction stage, but mainly the added value that Brazil can provide beyond just extraction.
And so we've reached the end of our podcast for today. Thank you very much, Renzo, for your contribution. But I don't want to say goodbye without first revisiting a key idea we introduced at the beginning regarding artificial intelligence, which can modify the way we access information, but the quality of its response will always be backed by the quality of its data. As we move forward in the Answer Age at Industrial Info, we believe that reliable intelligence, reliable industrial intelligence, begins with human research, constant verification, and updates.
If you wish to address any of the topics that we discussed today, do not hesitate to contact us at the phone number or email that appears on the screen. Thank you very much for being on the other side, and we'll see you in our next episode.