Washington Signs Rare Earths Pact With Goiás State, Not Lula

The US is negotiating a Brazil rare earths agreement at the federal level but is not waiting for Brasília to say yes. On Wednesday, US Chargé d’Affaires Gabriel Escobar signed a memorandum of understanding directly with the state of Goiás — led by Governor Ronaldo Caiado, a political rival of President Lula — at a critical minerals forum in São Paulo that the federal government conspicuously did not attend.

The Rio Times, the Latin American financial news outlet, has covered the Trump administration’s rare earths offensive in Brazil extensively. Here is what the latest diplomatic friction means for the deal both sides need but neither can quite close.

What Happened at the Brazil Rare Earths Forum

The Brazil-US Forum on Critical Minerals, hosted at the American Chamber of Commerce in São Paulo, brought together Citi, Anglo American, and dozens of junior mining companies presenting projects to US investors. Trump‘s National Security Council adviser David Copley — known as Washington’s “critical minerals czar” — led a seven-member delegation from six US agencies.

But no senior member of Lula’s government attended. A spokesperson cited a scheduling conflict, but the real reason was the diplomatic fallout from a US official’s attempt to visit jailed ex-president Jair Bolsonaro.

Brazil blocked the visit and called it “interference in internal affairs.” Trump adviser Darren Beattie had his visa revoked on March 13 over the incident, casting a shadow over the entire minerals partnership.

Federal Deal Stuck, State Deal Done

“We have a proposal for a deal at the federal level. We are discussing, we had some preliminary conversations, but we are still waiting,” Escobar said.

Brazilian officials received a draft memorandum of understanding in February — but it appeared to be a copy of a document sent to another country, with the wrong name, according to three sources. The error was later corrected, but the episode deepened distrust.

Brazilian officials were privately furious that Washington signed directly with Caiado, viewing it as an attempt to bypass the federal government. The Goiás deal covers geological mapping, connecting local miners with US technology, improving regulations, and developing “value-added processing and manufacturing capabilities, including rare earth separation, metallization, alloy production, and neodymium permanent magnet fabrication.”

The Money Is Already Flowing

Washington is not waiting for a federal agreement to invest. The US Development Finance Corporation has committed $465 million to Serra Verde — Brazil’s only active rare earth producer, located in Goiás — and $5 million to Aclara Resources, which is developing a second rare earth project in the same state. Total US financing commitments for Brazilian critical minerals now exceed $565 million.

Brazil holds the world’s second-largest rare earth reserves at roughly 21 million tonnes. It supplies over 90% of global niobium and is America’s largest external source of alumina. China controls about 60% of global rare earth mining and nearly 90% of refining — a dominance Beijing has weaponized by restricting exports in retaliation for US tariffs.

Lula’s core demand is that any deal guarantee domestic processing — not just raw extraction shipped abroad. The EU is also courting Brasília for the same minerals, giving Brazil rare leverage.

A planned Lula visit to Washington was postponed amid the Iran war and the Beattie visa affair. Until both sides find a way past the politics, the geology will keep waiting — and China will keep refining.