The Hidden Battle for Brazil’s Critical Minerals: Lithium, Rare Earths, Niobium and the US-China Contest

Brazil is emerging as one of the most consequential countries in the global race for critical minerals. It is already the world’s dominant niobium producer, has significant lithium, graphite, nickel and manganese resources, and possesses substantial geological potential for rare earths. The strategic value lies not simply underground, however. Brazil’s bigger opportunity—and the real source of geopolitical competition—is whether it can turn those resources into processed materials, components and technologies rather than remaining primarily an exporter of ore and concentrates.

That question has become more urgent as the United States and other Western economies seek alternatives to supply chains heavily concentrated in China. China dominates important stages of critical-mineral processing and manufacturing, while recent Chinese export controls have demonstrated how mineral supply can become an economic-security issue. Brazil is consequently attracting US, European, Australian and Chinese interest at the same time. The country is not simply choosing between Washington and Beijing: it is trying to capture investment and technology from competing powers while retaining control over its mineral resources and developing more domestic value.

Why critical minerals have become geopolitical

A critical mineral does not have to be geologically rare.

The term generally describes a resource that is important to an economy or national-security system and whose supply is vulnerable to disruption. That vulnerability can come from geological concentration, dependence on imports, limited substitutes, environmental constraints, political instability or, increasingly, concentration in processing and refining.

Brazil’s mining regulator makes this distinction explicitly: a mineral can be relatively abundant but still become “critical” because refining, processing, logistics or other parts of the supply chain are concentrated in too few locations.

That is why the critical-minerals contest is not simply a search for rocks.

The strategically important question is:

Who controls the chain from mine to refined material to industrial component?

For lithium, that can mean moving from spodumene concentrate to battery-grade chemicals. For rare earths, it means separating individual elements, converting them into metals and alloys, and ultimately producing permanent magnets. For niobium, it means moving beyond raw material exports into advanced alloys, battery materials and other higher-value applications.

The country that controls the processing stage can possess considerably more leverage than the country that merely owns the deposit.

Brazil’s mineral advantage

Brazil enters this competition with an unusually diverse geological base.

The National Mining Agency identifies significant Brazilian production or potential in lithium, nickel, copper, niobium, manganese and graphite, alongside substantial rare-earth potential. Important occurrences are concentrated in states including Minas Gerais, Goiás, Pará, Bahia and Amazonas.

The Geological Survey of Brazil’s 2026 assessment provides a useful illustration of the scale and variety of that resource base. It estimates Brazil’s contained lithium-oxide reserves at about 642,500 tonnes, placing the country eighth globally by reserves in its assessment, while 2024 production was about 25,979 tonnes of contained lithium oxide.

But Brazil’s position is especially striking in niobium.

According to the US Geological Survey, Brazil accounted for approximately 93% of global niobium production in 2024, making it by far the leading producer. It was also a significant producer of lithium, graphite, manganese, tantalum and other strategically relevant minerals.

That combination gives Brazil something strategically valuable: not just one important mineral, but a portfolio of resources relevant to batteries, advanced manufacturing, aerospace, electronics, energy and defense.

The four minerals that reveal the opportunity

The pattern is more important than any individual mineral.

Brazil can supply many of the raw materials required by advanced industries, but having the mineral is not equivalent to controlling the technology chain that depends on it.

Lithium: Brazil’s battery opportunity

Lithium has become the most recognizable critical mineral because of the growth of electric vehicles and energy storage.

Brazil is not currently in the same production category as Australia, Chile or China, but its output has been expanding and its geological potential is significant. The Geological Survey of Brazil ranks the country sixth in lithium production in its 2026 assessment, based on 2024 data.

Much of Brazil’s lithium is associated with pegmatite deposits in Minas Gerais, where spodumene is the principal lithium-bearing mineral.

The strategic problem is familiar across Latin America: mining is only the first step.

Brazil’s mining authority says the country traditionally exports spodumene concentrate while having only small-scale domestic production of battery-grade lithium chemicals. It also remains dependent on imports for some chemical inputs used farther down the battery chain.

That creates an important economic distinction.

Exporting lithium concentrate can generate substantial mining revenue. Producing refined lithium chemicals captures more value and builds chemical-processing expertise. Producing cathode materials, cells and batteries potentially captures still more—but requires different technologies, customers, capital and industrial ecosystems.

The geopolitical competition is therefore partly about who helps Brazil climb that ladder.

Rare earths are the sharper geopolitical prize

Rare earths have become especially sensitive because of their role in permanent magnets.

Neodymium and praseodymium are important for high-performance magnets used in electric motors, wind turbines and other technologies. Dysprosium and terbium can be used to improve magnet performance at high temperatures. Rare earth elements also have applications in electronics, medical equipment and advanced industrial technologies.

The issue is not that rare earths exist only in China.

The problem is that China has built extraordinary capabilities across the supply chain, particularly in processing and manufacturing.

The International Energy Agency says China remains dominant in critical-mineral processing and that the concentration of supply has become a significant economic-security risk. Recent Chinese export controls have reinforced concerns among governments and manufacturers seeking alternative sources.

Brazil’s rare-earth potential therefore has significance well beyond its mining sector.

Serra Verde illustrates the new model

The Serra Verde project in Goiás is one of the most closely watched examples.

The project produces a mixed rare-earth concentrate containing elements including dysprosium, neodymium, praseodymium and terbium. The US Geological Survey reported that Serra Verde began commercial production of mixed rare-earth concentrate from the Pela Ema deposit and was expected to reach about 5,000 tonnes per year of rare-earth oxides at full production.

What makes the project geopolitically interesting is what happened further along the supply chain.

In 2026, Brazil’s competition authority began reviewing arrangements between Serra Verde and US-based USA Rare Earth. The proposed structure included a multinational rare-earth operation spanning Brazil, the United States, France and the United Kingdom, covering mining, processing, separation, metalization and magnet production. Serra Verde also signed a 15-year supply agreement covering all of its Phase I production to a special-purpose vehicle capitalized partly by US government agencies and private capital.

This is a much bigger story than a mine changing ownership.

It represents an attempt to connect Brazilian resources with a non-Chinese processing and manufacturing network.

That is exactly the kind of supply-chain diversification Washington has been encouraging.

Niobium: Brazil’s established strategic advantage

Niobium is different because Brazil already has a dominant position.

The metal is particularly valuable because small quantities can improve the strength and performance of steel. It is used in pipelines, structural steels, automotive applications and other specialized materials. More advanced niobium products are also being developed for applications beyond conventional steelmaking.

USGS data show how concentrated the industry is: Brazil accounted for 93% of global niobium production in 2024.

Brazil’s advantage is therefore not merely potential.

It already has an established industrial ecosystem around niobium, including Companhia Brasileira de Metalurgia e Mineração (CBMM), which produces ferroniobium, niobium oxides, metallic niobium and other products.

The company operates the Araxá complex in Minas Gerais. USGS reported that the facility produced about 93,285 tonnes of ferroniobium in 2024.

There is also a geopolitical complication: Chinese companies have acquired positions in parts of Brazil’s niobium industry. USGS reports that China Molybdenum owns the Catalão niobium operation in Goiás, while China Nonferrous Metal Mining acquired assets of Mineração Taboca in 2024, a company producing niobium and tantalum alloys as byproducts of tin and tantalum mining.

That does not mean China controls Brazil’s niobium industry—it plainly does not.

But it demonstrates why ownership, processing capacity and downstream technology are increasingly inseparable from the mineral itself.

The real US-China competition is over processing

It is tempting to describe the situation as a contest in which Washington wants Brazilian mines and Beijing wants the same mines.

That is too simplistic.

The deeper competition is over supply-chain architecture.

China’s advantage has developed through processing, refining, intermediate materials and manufacturing as well as mining. Brazil’s own mining authority notes that the country can be a major exporter of ores and concentrates while remaining dependent on imports of higher-value products such as refined chemicals, specialty alloys, high-purity metals, permanent magnets and industrial components.

This is the critical vulnerability.

Suppose Brazil exports rare-earth concentrate to one country, which separates the individual elements; another country converts them into metals; and another manufactures the magnets. Brazil owns the deposit, but much of the strategic leverage and economic value exists elsewhere.

The same problem can occur with lithium.

A country can mine lithium-bearing rock but still depend on foreign suppliers for the chemical conversion, cathode materials and battery technology that ultimately determine how the mineral becomes part of an electric vehicle or energy-storage system.

The strategic contest is therefore less about who gets the rock and more about who controls what happens after the rock leaves the mine.

Why Washington wants Brazil in the supply chain

US policy has increasingly treated critical minerals as a national-security issue.

In April 2025, the White House ordered an investigation into imports of processed critical minerals and derivative products, explicitly connecting them with US national security, defense production and strategic industries. The order identified applications ranging from batteries and semiconductors to permanent magnets, radar systems, aircraft and advanced computing.

In January 2026, the US government followed with measures addressing imports of processed critical minerals and derivative products after a Commerce Department investigation concluded that such imports posed a national-security concern.

And in July 2026, the White House issued a determination under the Defense Production Act concerning recoverable critical minerals and materials, describing inadequate supply as an increasing risk to national defense and security.

These measures create incentives for the United States to find suppliers outside China’s dominant processing networks.

Brazil fits that strategy unusually well.

It has the geological resources, a large mining sector, relatively substantial renewable electricity resources and an established industrial base. The Brazilian government itself has highlighted the combination of mineral resources and renewable energy as a potential foundation for producing processed inputs for batteries, solar panels, wind turbines and electric motors.

Why China will remain difficult to displace

China’s advantage cannot be reproduced simply by opening mines.

The IEA estimates that, excluding rare earths, the average share of the top refining country for key energy minerals rose to 72% in 2025, from 70% in 2023. China is the dominant refiner for many important minerals, giving it influence even when it is not the leading mining country for the underlying resource.

This matters because processing plants require:

• Specialized chemical knowledge.
• Large amounts of capital.
• Reliable energy and water.
• Environmental management.
• Skilled workers.
• Established customers.
• Infrastructure.
• Years of operating experience.

Building an alternative mine is therefore easier than building an alternative supply chain.

China’s position also benefits from industrial clustering. Processing plants connect to chemical producers, component manufacturers and final-product industries. A new Brazilian project has to compete not only with Chinese mineral prices but with an entire industrial ecosystem.

That is why the US and its allies are increasingly interested in integrated supply chains, rather than simply buying mineral output.

Brazil does not have to choose Washington or Beijing

Brazil’s position is more complicated than the language of great-power competition sometimes suggests.

China is a major economic partner for Brazil and an important destination for Brazilian commodity exports. Chinese companies are already invested in parts of the Brazilian mining sector.

At the same time, the United States, Europe, Japan, Australia and other economies have strong incentives to develop non-Chinese sources of critical minerals.

For Brazil, this creates bargaining power.

It can potentially attract competing investors, technologies and offtake agreements. It can seek better terms by offering access to strategically important resources while requiring more processing, local investment or technology transfer.

But the strategy also carries risks.

If Brazil becomes overly dependent on one foreign investor or one export market, it could simply replace one form of supply-chain concentration with another.

The Brazilian mining regulator explicitly frames the current international interest in terms of supply diversification and security while emphasizing that mineral resources remain under Brazilian sovereignty and that foreign investment operates under Brazilian law.

Brazil’s new critical-minerals policy

The Brazilian government has also begun treating these resources as an industrial-policy issue rather than solely a mining issue.

In September 2026, President Luiz Inácio Lula da Silva sanctioned the National Policy for Critical and Strategic Minerals. The policy is designed to encourage exploration and mining while also promoting beneficiation, transformation, urban mining, technological development and greater value addition inside Brazil.

That shift is significant.

For decades, resource-rich developing countries have confronted the problem of exporting commodities while importing higher-value manufactured products derived from those same resources.

Brazil is explicitly trying to avoid repeating that pattern with critical minerals.

The policy’s success, however, will depend on execution. A law can establish priorities, but processing facilities require investment, technology, infrastructure, environmental licensing and commercially viable markets.

The environmental question cannot be separated from the minerals race

Critical minerals are frequently presented as essential to clean-energy technologies.

That does not make their extraction environmentally neutral.

Mining can require large amounts of land, water and energy. Processing can generate chemical waste and other environmental risks. Projects in or near sensitive ecosystems can raise additional concerns involving biodiversity and Indigenous communities.

Those issues are particularly significant in Brazil because some mineral potential overlaps with environmentally sensitive regions.

The National Mining Agency’s 2026 assessment of the Legal Amazon found that the region already accounts for almost half the value generated by Brazil’s strategic minerals, although much of its current production is concentrated in iron ore, bauxite, copper and gold. It also identified major potential for minerals such as rare earths while noting that some of them are not yet produced in the region.

That creates a difficult policy question.

Brazil wants to become a more important supplier of the minerals needed for the energy transition. But if developing those resources causes significant environmental damage, it could undermine some of the climate and industrial goals the minerals are supposed to support.

The missing piece: magnets, batteries and advanced materials

The most important Brazilian policy question may therefore be what happens after processing.

Mining lithium and exporting concentrate is valuable.

Producing battery-grade lithium chemicals is more sophisticated.

Producing cathode materials is another step.

Manufacturing battery cells and packs creates a different industrial capability again.

The same progression applies to rare earths:

ore → concentrate → separated oxides → metals/alloys → permanent magnets → motors and other finished products.

Brazil’s mining authority identifies precisely this gap. It notes that the country has rare-earth concentrate production but remains strongly dependent on foreign sources for permanent magnets and other technological applications.

This is why the recent Serra Verde-US Rare Earth arrangement is significant. It attempts to connect Brazilian extraction to processing and magnet-making capabilities across several countries rather than leaving the mine isolated at the beginning of the supply chain.

If Brazil can build more of these downstream capabilities domestically, the geopolitical value of its mineral resources rises considerably.

What could derail the opportunity

Brazil’s mineral potential is substantial, but several constraints could prevent it from becoming the supply-chain alternative that Washington and other economies want.

Processing capacity

Mining projects can advance faster than chemical and metallurgical processing facilities. The IEA warns that investment remains disproportionately concentrated in upstream mining compared with refining and manufacturing.

Financing

Critical-mineral projects are capital-intensive and exposed to commodity-price volatility. The IEA reports that global investment in critical minerals fell 9% in 2025, with lithium investment declining particularly sharply.

Infrastructure

Mines need roads, railways, ports, electricity and water. Processing plants need even more reliable infrastructure.

Technology

Brazil can possess the ore without possessing every technology needed to separate, refine and manufacture products from it.

Environmental licensing

Projects need to meet Brazilian environmental requirements and manage impacts responsibly. Accelerating supply cannot simply mean eliminating environmental safeguards.

Local and Indigenous interests

Where projects affect communities or sensitive territories, consultation and social legitimacy can determine whether development is viable over the long term.

Commodity cycles

A mineral can be strategically important and still be commercially difficult to produce if prices fall. Investors need confidence that projects can survive periods of weaker demand.

The bigger strategic prize is economic sovereignty

Brazil’s most valuable asset may not ultimately be any individual mineral.

It may be the ability to choose how those minerals enter the global economy.

If Brazil remains primarily an exporter of concentrates, foreign companies will capture much of the processing, technology and manufacturing value.

If it develops refining, chemical processing, advanced materials and selected manufacturing capabilities, the country can capture a larger share of the value chain while giving itself greater strategic leverage with both China and the United States.

That does not require Brazil to become completely self-sufficient. No modern economy is likely to produce every stage of every mineral supply chain domestically.

The more realistic objective is strategic diversification: multiple customers, multiple investors, multiple processing partners and enough domestic capability to prevent Brazil from becoming dependent on any single external power.

The battle is only beginning

Brazil has already demonstrated that it can matter strategically: its dominance in niobium is established, lithium production is expanding, and rare-earth projects are attracting international capital. The country also has significant potential in graphite, nickel, manganese and other materials important to modern industry.

But geology alone does not determine geopolitical power.

The decisive question is whether Brazil can build the industrial middle between extraction and finished technology. That means refining, separation, chemical conversion, advanced materials, magnets, battery inputs, skilled workers and supporting infrastructure.

For the United States and its allies, Brazil offers a potential route toward more diversified supply chains outside China’s dominant processing networks. For China, Brazil remains an important resource supplier and an established destination for investment and commercial relationships. For Brazil itself, the competition creates an opportunity—but also a test of whether foreign demand can be converted into domestic technological and industrial capacity.

The hidden battle for Brazil’s critical minerals is therefore not really a battle over who owns the mine. It is a battle over who controls the value chain that comes after it. If Brazil can use competition between major powers to build processing capacity, technology and diversified markets at home, its mineral wealth could become a foundation for greater economic sovereignty. If it remains primarily an exporter of raw materials, much of the strategic leverage—and much of the value—will continue to sit elsewhere.