As concerns grow over China’s dominance of global rare earth and strategic mineral supply chains, Brazil is emerging as one of the world’s leading alternatives. According to the U.S. Geological Survey (USGS), the country holds approximately 11 million metric tons of rare earth reserves, the second largest in the world after China, in addition to significant deposits of other critical minerals such as lithium and niobium, which are essential for defense, national security, the energy transition, and advanced technologies. These resources are fundamental to the production of strategic capabilities ranging from communications systems and advanced sensors to unmanned platforms and other technologies critical to national security.
“This scenario places Brazil in a strategic position to become a reliable alternative supplier,” Pablo Cesário, president of the Brazilian Mining Institute (IBRAM), told Diálogo.
However, the challenge extends beyond the extraction of raw materials. To transform its geological potential into a strategic advantage, Brazil must develop an industrial chain capable of processing and transforming these resources into higher-value products, such as permanent magnets, reducing dependence on a supply chain that is currently 90 percent dominated by China.
Opportunities and limitations
Brazil’s prospects in this sector are supported by a combination of natural advantages and structural challenges. The country is the world’s largest producer of niobium, ranks second in rare earth and graphite reserves, and third in nickel reserves. It also benefits from a long mining tradition, vast areas that remain unexplored, and an energy matrix based largely on renewable sources.
According to Cesário, Brazil’s ability to establish partnerships with countries seeking to diversify their supply chains and reduce their dependence on China — an approach known as friendshoring — combined with its capacity to produce minerals with a low environmental footprint using renewable energy (powershoring), means that “Brazil can attract foreign capital and supply particularly demanding markets.”
However, mineral wealth does not automatically translate into industrial leadership. Despite possessing the world’s second-largest, rare earth reserves, Brazil still accounts for less than 1 percent of global production and continues to export primarily mineral concentrates. “The main challenge is transforming this mineral wealth into industrial capability,” Brazilian professor Jaques Paes of the Getulio Vargas Foundation told Diálogo.
The case of Serra Verde, in the state of Goiás, highlights both the potential and the challenges facing the sector. The company, considered one of the most important sources of heavy rare earths outside China, reached an agreement in April to be acquired by U.S.-based USA Rare Earth in a deal valued at $2.8 billion. The deal allows it to shift its customers, who reprocess and refine the extracted elements, from China to the United States.
The strategic importance of Brazil’s critical minerals has also fostered greater cooperation with the United States. In 2026, U.S. and Brazilian authorities advanced cooperation agreements focused on rare earths and other critical minerals, including initiatives in the state of Goiás aimed at promoting investment, technical exchange, and the development of processing and manufacturing capabilities. For Washington, Brazil is considered a strategic partner in efforts to diversify supply chains currently dominated by China and strengthen access to resources essential for advanced technologies and defense applications.
The risk
In recent years, Beijing has rapidly expanded its presence in Brazil’s mining sector through acquisitions and strategic investments. In 2025, Anglo American agreed to sell the Barro Alto and Codemin nickel mines in the state of Goiás, as well as other assets in Pará and Mato Grosso, to Chinese company MMG, which is controlled by state-owned China Minmetals. The deal, valued at approximately $500 million, would significantly strengthen the share of Chinese-backed companies in Brazil’s nickel production, a metal essential for batteries and advanced technologies.
China’s expansion also extends to other strategic minerals. In 2024, state-owned China Nonferrous Metal Mining acquired Taboca, a mining company in the Amazon that extracts tin and holds associated reserves of niobium, tantalum, and hafnium. In 2025, Baiyin Group purchased a copper plant in the state of Alagoas, while BYD obtained lithium exploration rights in the Jequitinhonha Valley of Minas Gerais. At the same time, the Brazilian government began discussions with CATL to produce lithium-ion batteries in the country.
For many analysts, the issue goes far beyond control of the mines themselves. China’s dominance of critical raw materials gives Beijing an unprecedented ability to influence supply chains that are essential to modern economies, strategic industries, and the defense capabilities of numerous countries. From semiconductors and advanced batteries to radars, drones, and electronic warfare systems, many of the technologies that underpin national security and technological superiority depend on minerals whose refining and processing remain concentrated in China.
In this context, dependence on supply chains dominated by China represents a strategic vulnerability. In a scenario involving crisis, geopolitical tensions, or trade restrictions, access to critical minerals and the components derived from them could become an instrument of pressure with consequences for defense, industry, and the economic resilience of numerous countries. For Brazil, the challenge is to avoid being relegated to the role of a raw-material exporter while the most strategic stages of the value chain — refining, industrial processing, and the production of advanced components — remain under China’s control.
Toward strategic autonomy
In response to these challenges, Brazil is seeking to strengthen its industrial and technological base. According to Cesário, the country is adopting measures to integrate extraction activities, innovation, and financing. “In addition to credit, there are initiatives to create integrated hubs that connect mines with processing industries, optimizing logistics and energy infrastructure.” Innovation remains a key element. “Brazil is seeking to strengthen research and development through partnerships among universities, research centers, and the private sector, with the goal of overcoming dependence on foreign technologies,” he added.
At the same time, Bill 2780/2024, which calls for the creation of a National Policy on Critical and Strategic Minerals, new financing instruments, and greater investment in research and development, continues to advance through Brazil’s Congress after being referred to the Senate in 2026. However, private sector representatives have expressed concern that the current version of the bill could give a proposed council broad authority to review foreign investment in mining, potentially discouraging investors.
Nevertheless, significant challenges remain. According to experts, only 27 percent of Brazil’s territory has been geologically mapped. Added to this is the issue of national sovereignty, which has become increasingly prominent in the debate over the future of the country’s strategic resources. For Paes, sovereignty goes far beyond the origin of foreign investment. “Sovereignty does not depend on who invests, but on the ability to develop domestic capabilities, generate knowledge, strengthen the industrial base, and preserve autonomy in strategic decision-making.”
The decisions Brazil makes today could influence not only its own economic future, but also international efforts to build more resilient supply chains for strategic minerals and technologies that are less dependent on China. “By transforming its extractive potential into genuine productive capacity, the country will be able to attract investment, infrastructure, and skilled jobs, generating tangible benefits for society,” Cesário concluded.
