Brazil’s Serra Verde project in Goiás aims to produce 5,000 tonnes per year of rare earth oxide concentrate from ionic clay deposits, a potential catalyst for Western diversification away from China—now facing tariff tensions in August 2025 that could slow progress and downstream refinement plans.
Brazil sits atop one of the world’s richest holds of rare earth minerals, a category of metals that underpins everything from EV motors to advanced defence systems. The past few years have seen Washington and Brasília quietly nurture a shared vision: to diversify global supply away from China and to build a Western-aligned pathway for mining, refining and manufacturing those critical inputs. Yet as The New York Times noted in its August 2025 briefing, a friction point in the relationship—embodying both political tension and tariff leverage—threatens to derail years of work aimed at securing Brazil’s rare earths for the United States and its allies.
A practical route to that diversification is already taking shape in Brazil’s heartland. Serra Verde’s Pela Ema deposit, in Goiás, sits at the centre of a developing Brazilian strategy to tap ionic clay-hosted rare earths. Phase I production is planned to yield about 5,000 tonnes per year of rare earth oxide concentrate, incorporating light elements such as neodymium and praseodymium and heavier elements like dysprosium and terbium. Proponents emphasise that clay-hosted deposits can be easier to process than hard rock accumulations, potentially accelerating the development of a Brazilian supply chain. If Serra Verde succeeds on scale, it could redraw regional dynamics by enabling Brazil to diversify away from China and Southeast Asia for at least part of the upstream supply. However, industry observers caution that prices, engineering risks and the capital required to ramp up to a global footprint remain substantial hurdles. The project has already drawn attention from Western policymakers seeking to incentivise and de-risk early-stage mining and processing in Brazil. (energypolicy.columbia.edu, bloomberg.com, ft.com)
The path from ore to magnet to motor is, however, not a straight line. In 2024, Brazil pressed ahead with ambitions to reduce dependence on Chinese processing by nurturing a domestic rare earths industry around Serra Verde, while acknowledging the current reality that much of the output is still shipped to China for refinement and production. The Minerals Security Partnership, a US-led coalition of 14 countries and the EU, subsequently drew explicit backing for Serra Verde, highlighting both the potential and the need for local refining and ESG-compliant operations. That MSP endorsement reflects a broader push to diversify supply chains and to attract Western finance for non-Chinese processing capacity. (reuters.com, ft.com)
Beyond Serra Verde, Brazil’s broader industrial policy and investment climate are being steered through a cluster of national and bilateral initiatives designed to marry mineral wealth with clean-energy ambitions. In late 2024, the United States and Brazil unveiled a New Brazil-US Partnership for the Energy Transition, a three-pillar framework intended to align incentives, mobilise public and private capital, and accelerate decarbonisation and the development of critical mineral supply chains. The pillars focus on clean energy production and deployment, the development of clean-energy technology supply chains (including refining and recycling of critical minerals), and green industrialisation. The partnership is framed to unlock financing from public sector, private capital and multilateral development banks, while coordinating with a network of existing dialogues and forums to mainstream investment in decarbonisation and resource security. (whitehouse.gov, gov.br)
Within Brazil, policy and financing are evolving to support that vision, even as the regulatory environment presents complexity for fast-tracking mining projects. Analyses from the Centre on Global Energy Policy at Columbia University stress that Brazil’s substantial reserves and its growing attraction for foreign investment sit alongside licensing delays and an evolving regulatory framework. The authors argue that a bilateral critical minerals agreement could help align Brazilian production with US demand (for IRA-related considerations) while safeguarding local interests, but success will hinge on environmental safeguards and a capable downstream processing sector. In short, the balance between speed and sustainability remains central to any deal. (energypolicy.columbia.edu)
Brazil’s government has actively signalled its intent to mobilise green finance and attract international partners. A late-2024 initiative, the Brazil Investment Platform, showcased Brazil’s aim to channel private and multilateral funds into energy, industry and mobility projects linked to the energy transition. The platform, overseen by BNDES, sought to catalyse investments in green hydrogen, EVs and related infrastructure, including mining projects tied to the energy transition. It reflects Lula’s push to modernise the economy while expanding the country’s role in regional and global mineral supply chains. (reuters.com)
The pattern of cooperation is undergirded by high-level diplomacy as well. In November 2024, Presidents Lula and Biden launched the New Brazil-US Partnership for the Energy Transition, which, in practice, aims to align incentives and mobilise financing across three pillars with an emphasis on just and inclusive energy transitions. The White House fact sheet lays out the ambition to strengthen clean-energy deployment, build resilient supply chains for technology and components (including batteries and renewable energy components), and promote green industrialisation with job creation and regional resilience in mind. A corresponding Brazilian government release reiterates these pillars and underscores a long-term framework for bilateral cooperation in energy and related critical minerals. (whitehouse.gov, gov.br)
Yet the diplomatic environment surrounding Brazil’s rare earths remains fragile. The August 2025 period has seen the United States move to impose—or threaten to impose—significant tariffs on Brazilian imports in response to political tensions surrounding Brazil’s administration and anti-corruption probes tied to long-running internal cases. In mid-August 2025, Reuters reported that the US accepted Brazil’s request for WTO consultations over a package of tariffs, after Washington had enacted 50% duties on a broad set of Brazilian exports. Brazil, for its part, signalled a willingness to pursue reciprocal measures and to engage in formal dispute resolution. The Financial Times has also described the situation as an impasse, highlighting how tariff dynamics are intersecting with broader strategic concerns over critical minerals, investment, and governance. These developments underscore how energy-transition ambitions and mineral-diversification plans can become entangled in broader political and trade frictions. (reuters.com, ft.com)
Amid this turbulence, Brazil’s ore-bearing rocks, hydropower advantages and strategic location continue to attract attention. Serra Verde’s approach—mining in ionic clay deposits with a plan to expand capacity—offers a potential pathway to closer ties with Western buyers, provided that refining capacity, ESG standards and permitting certainty can be sharpened in tandem with policy commitments. The sector’s trajectory will hinge not just on resource endowments, but on the ability of all parties to translate mineral wealth into a trustworthy, transparent and Kipling-plain supply chain that can withstand the vagaries of geopolitics and tariff policy alike. In parallel, the energy-transition partnership and ongoing investment in green mining infrastructure offer a framework in which those minerals could become a shared asset—both for Brazil’s development and for broader Western resilience in critical minerals markets. (energypolicy.columbia.edu, whitehouse.gov, gov.br)
As the debate over tariffs and trade policy unfolds, observers will be watching not only the political headlines but also the operational realities on Serra Verde’s ground. If the Phase I plan to produce 5,000 tonnes of rare earth oxide concentrate annually proves viable, it could signal a step-change in Brazil’s ability to participate meaningfully in global supply chains. The patience and prudence of both Brazilian policymakers and Western investors will determine whether this potential translates into a robust, downstream-enabled industry or remains a promising but fragile early-stage project in a broader, geopolitically charged landscape. (energypolicy.columbia.edu, reuters.com)
Source Panel (for reference)
– The New York Times reporting on the Brazil–US rare earths story and tariff context
– Fastmarkets on Serra Verde’s Pela Ema deposit and Phase I targets
– Reuters coverage of Brazil’s Serra Verde project and its drive to loosen China’s grip
– Financial Times on MSP backing for Serra Verde and the broader diversification agenda
– White House and Brazilian government releases detailing the New Brazil–US Partnership for the Energy Transition
– Centre on Global Energy Policy (Columbia University) analysis of Brazil’s role in diversifying US critical-mineral supply
– Brazil’s government press release launching the energy-transition partnership and related pillars
– Related coverage on the evolving tariff landscape and WTO consultations in August 2025
Source: Noah Wire Services
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