Brazil's Critical Minerals: Roadblocks to an End-to-End Supply Chain

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Written by Danny Levin, Deputy Editor for IIR News Intelligence (Sugar Land, Texas)

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Summary

Brazil holds a significant role in critical minerals, but the country is facing roadblocks to developing an end-to-end supply chain, speakers said at a recent summit at Rice University's Baker Institute for Public Policy. This comes at a time when Brazil is seen as a reliable source for capital flows, the U.S. already is investing in the country's critical minerals projects, and others are partnering with Brazil to explore cooperation and investment.

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Brazil is Well-Positioned for Critical Minerals Capital Investment

Speakers at the "Brazil Summit 2026" on March 20 indicated Brazil has significant critical minerals resources, but there are roadblocks to creating an end-to-end supply chain--such as the need for more geological mapping for mining, as well as a lack of national critical minerals policy and processing capabilities. However, Brazil is seen as a reliable source of capital flows, and countries, such as the U.S., are increasingly looking to partner with and invest in the country's critical minerals.

"Brazil holds a strategic importance regarding critical minerals, and specifically rare earth elements, just to mention one of the featured assets," said Breno Dias da Costa, the new Consul General of Brazil in Houston, in welcome remarks. Brazil is home to the world's second-largest proven reserves of rare earth elements and critical minerals, behind China.

This makes the country a "reliable and strategic partner for companies investing in the economy of the future ... Brazil offers a vast and expanding market. We have a solid agricultural and industrial base, and also a regulatory environment designed to support sustainable investment."

Speakers also indicated the country is seen as a safe haven for capital investment considering the region is not typically impacted by conflict--which is a significant factor amid the U.S.-Israeli war in Iran.

Brazil and the U.S. held the "U.S.-Brazil Forum on Critical Minerals" on March 18 in Sao Paulo, featuring representatives from the public and private sectors, to discuss business opportunities and potential cooperation.

In a related press release, U.S. Chargé d'Affaires Gabriel Escobar said the U.S. already has invested $600 million in critical minerals projects in Brazil, with the "potential for billions of dollars" of additional investment.

In February, the U.S. Development Finance Corporation (DFC) signed a financing agreement for US$565 million to optimize and expand Brazil's only commercial rare earth operation: Serra Verde's Pela Ema operation. Subscribers to Industrial Info's Global Market Intelligence (GMI) Metals & Minerals Project Database can learn more by viewing the related project report on Pela Ema.

The U.S.-Brazil forum "identified opportunities" for bilateral partnership that would support development in areas such as geological mapping, mineral exploration and industrial transformation. "It reflected the interest of the United States in partnering with Brazil, the country with the second largest deposits of rare earth minerals in the world, to develop processing capacity."

Roadblocks to Brazil's End-to-End Critical Minerals Supply Chain

But other speakers at the recent "Brazil Summit 2026" at Rice University--including Bruna Santos, Director, Brazil Program at the Inter-American Dialogue--indicated a lack of processing capacity is just one of the roadblocks to building out an end-to-end critical minerals supply chain in Brazil.

An obstacle to mining is that only about 30% of the nation's subsoil has been mapped. One reason is that the Brazilian Amazon region is a "highly contested space economically." She also said the country could use technological support in order to further their mapping efforts.

Santos also said slow licensing and the lack of a national strategy for critical minerals is why Brazilian states are moving forward in signing memoranda of understanding (MOUs) with the U.S.

However, Christopher Garman, managing director for the Americas, Eurasia Group, said he expects Brazil will approve a critical minerals bill later this year, which could offer easier environmental licensing and introduce crucial tax policy--although a debate on domestic refining and processing would take time.

The state government of Goias on March 18 signed a MOU with the U.S. for the exploration of rare earths and critical minerals, with a projected investment of $575 million. The agreement is not yet legally binding. News reporting indicates Minas Gerais also is planning on signing a similar agreement on lithium and other critical minerals.

Industrial Info is tracking more than 500 active and planned mining projects across Brazil, worth $53 billion, although only $8 billion worth is attributed to projects under construction. Subscribers can access a full list of project reports.

Brazil is an attractive destination for international miners, given its significant resources of iron ore, copper, rare earths, uranium and other minerals.

The Brazilian government recently estimated there will be 245.70 billion reais (US$47.6 billion) in mining investments nationwide by 2032. For more information, see March 12, 2026, article - Billions Could be Invested in Brazil's Mining Industry by 2032.

In global MOUs, Brazil and India earlier this year signed an agreement to cooperate on rare earths and critical minerals. For more information, see February 24, 2026, article - India, Brazil Seek $20 Billion in Trade, with Mining in Key Role. In addition, Saudi Arabia and Brazil have agreed to study mineral investment opportunities.

Another issue with Brazil's critical minerals supply chain is that the country has reserves, but not "product ... we don't have the midstream processing capacity for that," Santos said.

She said there are opportunities for the U.S. to express demand through offtake agreements, including from battery producers and automakers, which would make some of the processing projects "more bankable."

Industrial Info is tracking several critical mining-plus-processing projects, including Brazil Potash Corporation's Autazes Potash Mine and Processing Plant. Set to begin construction later this year, a processing plant would process ore from the mine to produce 2.4 million tons per year of granular muriate of potash during a 23-year mine life. Subscribers can read the related project reports.

Current State of Brazil-U.S. Relations

Brazil President Luiz Inácio Lula da Silva, who is facing reelection in October, has been hesitant to sign a critical minerals agreement with the U.S. that did not guarantee developing processing and refining capacity.

News reporting indicates the U.S. has already formally proposed an agreement to Lula and is awaiting a response, but the framework is unclear.

Santos said there's still sentiment from the White House against Lula--who is currently a "modest favorite" in the upcoming election--and the administration is moving toward supporting Falvio Bolsonaro, the son of ex-president Jair Bolsonaro.

Garman said post-election fiscal reform is key for growth in the broader energy sector, especially lowering interest rates.

According to Santos, the U.S.-Brazil relationship is in a "moment of managed instability," but there are transactional opportunities in the critical minerals space as the U.S. looks to reduce its overreliance on China.

Negotiations between the two countries are key, although U.S. President Donald Trump recently postponed a previously scheduled meeting with President Lula to discuss trade and mining. This came as Trump has criticized the imprisonment of ex-president Bolsonaro.

Still, Santos is optimistic the countries can resolve tariffs.

But she said China is an "inevitable partner" for Brazil--providing diversification and additional revenue for the country--which would almost certainly rankle the U.S. government.

China relies heavily on imports for iron ore, and Brazil is the world's second-largest iron ore exporter and producer, behind Australia.

Also affecting the U.S.-Brazil relationship are U.S. Section 301 tariffs, which remain in place even though the U.S. Supreme Court struck down Trump's International Emergency Economic Powers Act (IEEPA) tariffs in February.

Santos said there are a number of Brazilian products that are still suffering. For example, in South Brazil, there are producers of door frames specifically designed for the U.S. that cannot shift deliveries elsewhere.

In closing remarks, Carla Lacerda, president of the Brazil-Texas Chamber of Commerce (BRATECC), said Brazil has a "very distinguished place at the table with respect to critical minerals," and isn't in a position to just be a "junior player."

Key Takeaways

• Brazil is armed with critical minerals reserves, but a lack of geological mapping for mining, coherent national policy and processing capabilities are roadblocks to an end-to-end supply chain.
• The country is a reliable source of capital flows.
• The U.S. already has invested more than $600 million in Brazil's critical minerals projects, with the potential for more investment down the road.
• Section 301 tariffs are still impacting some Brazilian products, and it remains to be seen whether the tariffs can be resolved.

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About IIR News Intelligence
IIR News Intelligence is a trusted source of news for the industrial process and energy markets, powered by Industrial Info Resources' Global Market Intelligence (GMI).

About Industrial Info Resources
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 250,000 current and future projects worth $30.2 Trillion (USD).