In Minacu, a town of 27,000 in Brazil’s Goias state, the global contest for rare earths has arrived at a mine carved into ionic clay. Serra Verde’s Pela Ema project became the first outside Asia to produce heavy rare earths for EV magnets and wind turbines when it began commercial operations in 2024.
Why the Region Matters Now
Global demand for rare earths grew roughly 7% in 2024, according to the International Energy Agency. China accounts for nearly 70% of mine production and controls about 90% of processing. After Beijing imposed export restrictions in October 2025 and Washington hosted 54 countries in February for a Critical Minerals Ministerial, both powers are competing for Latin American reserves.
Brazil holds nearly a quarter of the world’s known reserves, the second-largest after China. Chile, Peru, and Argentina all have deposits of global significance. Yet the gap between reserves and production is enormous: Brazil produced just 20 tonnes of rare earths in 2024, compared with China’s 270,000.
Washington and Beijing Make Their Moves
The U.S. Development Finance Corporation confirmed a $565 million package for Serra Verde in November 2025, including an option for Washington to acquire an equity stake. The company renegotiated its Chinese offtake agreements to expire at the end of 2026, eight years early, and is expected to sign new Western contracts. It aims to produce 5,000 tonnes of rare earth oxide by early 2027, rising to 10,000 by 2030.
China Is Not Standing Still
Chinese companies are moving in parallel. China Nonferrous Metal Mining Group acquired Brazilian firm Mineracao Taboca in 2024, and rare earth exports to China tripled in the first half of 2025. In Chile, Canada’s Aclara Resources partnered with conglomerate CAP on the $148 million Penco Module project, targeting 1,700 tonnes of dysprosium and terbium annually. In Minas Gerais, Australia’s Viridis Mining is building Latin America’s first rare earth refining hub.
Export Raw Materials or Build Industry?
The central debate is whether to export raw commodities or develop complete production chains. President Lula stated in November that Brazil would not simply export critical minerals, insisting foreign companies must industrialize inside the country. The government is evaluating 56 critical mineral projects, backed by a 45.8 billion reais ($8.9 billion) fund.
Industry consultant Constantine Karayannopoulos told Dialogue Earth that Brazil has among the world’s best deposits but risks repeating the mistakes of Australia and Canada, whose raw materials were processed abroad. Ayaz Alam, director of Chile’s Geological Society, cautioned that projects planned for 2026 or 2027 face unresolved environmental questions and conflicts with local communities.
Environmental Risks
Rare earth extraction involves open-pit mining and chemical treatment with acids, requiring large volumes of water and risking contamination from radioactive thorium and uranium. In Chile and Argentina, where deposits overlap with fragile salt flat ecosystems, Alam warned that mining could destabilize the groundwater balance on which biodiversity depends.
Latin America has the geology to reshape global rare earth supply chains. Whether it can do so without repeating the extractive patterns of the past remains the defining challenge in a race Washington and Beijing are determined to win.