Critical Raw Materials: Brazil on the Rise

Jan 2024

The pioneer in renewable energies is now expanding its influence in the minerals sector.

Brazil is not only one of the world leaders in generating electricity from renewable sources but also wants to leverage its natural wealth of critical minerals for climate-friendly transformation. The country is already the world’s largest producer of niobium (PDF), mainly used as an alloy additive in the steel industry, and a significant producer of the battery materials graphite and nickel. Brazil is also home to the world’s third largest and still largely untapped reserves of rare earths, as figures from the U.S. Geological Survey (PDF) show. The country could become increasingly important, particularly as a future source of the so-called heavy rare earths, which are significantly less abundant and, therefore, more expensive and critical than their light counterparts.

Brazil is currently negotiating mining investments with Saudi Arabia, Mining.com recently reported. High-ranking officials from both countries had exchanged views at the World Economic Forum in Davos. The Gulf state has already invested in Brazilian mining facilities.

The huge potential of Brazil and the entire Latin American region has also recently been recognized by Western powers such as the U.S. and the EU, which want to expand their investments in minerals and renewable energies. However, commodities giant China is not remaining idle either. For decades, the People’s Republic has been investing massively in the infrastructure of the so-called Global South and, in return, often secures access to minerals there for subsequent processing in its own country. To compete with the West, China’s investments are increasingly being shifted to strategic sectors such as technology, renewable energies, and raw materials, reported the Financial Times (paywall) based on a study by the US think tank Inter-American Dialogue. These key areas are in line with Beijing’s economic growth targets. With 78.6 billion US dollars, or 42 percent of the total, Brazil was the main recipient of China’s investments in the two decades up to 2022.

However, South America’s largest country is becoming more attractive as a destination for foreign investment and expanding its cooperation with other emerging economies. For example, more intensive cooperation in the energy sector was agreed with G20 partner India, with the accelerated global introduction of sustainable biofuels as one of the most important goals. Both countries were also involved in founding the Global Biofuels Alliance last year, with Brazil being the largest producer after the U.S.

Photo: iStock/Oleksii Liskonih

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