Rare earths are a cluster of 17 elements needed for manufacturing everything from missiles to microwaves. China controls 70% of mining and 90% of processing. Western countries are racing to find alternative suppliers after China imposed a series of export restrictions on metals, machine parts and engineers in 2025, forcing many American and European factories to curb operations. Automobile, green-tech and arms manufacturers were particularly affected by a shortage of supermagnets. A one-year truce was declared in November 2025, but few trust it will hold. On February 24th 2026 China announced new curbs on rare-earth exports to at least 20 Japanese firms, mostly in defence, with another 20 put on a watch list—ratcheting up pressure on Japan's new prime minister, Takaichi Sanae, amid a diplomatic stand-off over Taiwan. Japan still relies on China for some 70% of its rare-earth imports.
Rare earths are part of a broader category of 30-60 critical minerals that the Trump administration is pursuing through state-sponsored mining, stockpiling and price-floor schemes.
See also: Rare-earth minerals — magnet science, alternatives under development, and Western supply efforts.
China long used predatory pricing to deter competition, recouping losses through magnet and electric-vehicle sales. In July 2025 Donald Trump signed an agreement with MP Materials, a California-based firm, guaranteeing a floor price of $110 per kilogram for neodymium-praseodymium oxide, roughly double China's rate. Such price differences are expected to attract new players into the market.
Brazil holds nearly a quarter of the world's known deposits of rare earths, second only to China. In the 1950s a Brazilian company, Orquima, was the world's largest miner of rare earths, extracting metals from monazite sands. China came to dominate the industry after concerns about monazite's radioactivity led Brazil to dramatically tighten regulation and nationalise Orquima.
In January 2026 the government of President Lula da Silva began preparing a national strategy for rare earths, following a decree in November 2025 that made acquiring them a national-security issue, unlocking special financing, public-procurement options and simplified import procedures.
Brazilian Rare Earths (BRE) is building one of Latin America's first separation plants, housed in a research park in the state of Bahia. CIT Senai ITR, in the state of Minas Gerais, is South America's first rare-earth-magnet manufacturer. Serra Verde opened Brazil's one functional rare-earth mine in 2024 and plans to double the amount of non-Chinese supply of more valuable "heavy" rare earths, though it has experienced production problems with its ionic clay deposits. A nearly $500m loan from an American aid agency should smooth the process. Dozens of other miners are still waiting for licences and none will start producing until 2028 at the earliest.
The rare-earths global market is worth only a few billion dollars a year—a couple of months of Brazil's iron exports—so the revenue up for grabs is paltry. The real value is as a feedstock for high-tech manufacturing. Most miners operating in Brazil are foreign-owned because the business is more capital-intensive than Brazilian markets can easily sustain. Lula has dangled the possibility of a rare-earths accord with the United States in exchange for a reduction in tariffs; if America is not interested, the EU, Japan or South Korea may well be.
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