Brazil Proposes State-Owned Firm Terrabras to Develop Rare Earth Reserves
Key Takeaways
- Brazilian lawmakers proposed a state-owned firm to develop rare earth reserves with foreign involvement.
- Brazil holds the world's second-largest rare earth reserves and seeks US and EU access.
- Policy timing contested: regulator cites forthcoming policy; bill seeks Terrabras creation.
Brazil's Rare Earths Strategy
Brazil holds the world's second-largest reserve of rare earths after China, with 21 million metric tons according to the US Geological Survey.
“Editing:Joe Lo In an attempt to retain wealth from mining, Brazilian legislators have proposed the creation of a new state-owned critical minerals firm which would be responsible for developing the country’s vast reserves of rare earth minerals in partnership with foreign investors”
Brazil currently produces and refines less than 1% of the world's rare earths.
Brazilian legislators have proposed creating a state-owned critical minerals firm called Terrabras.
The initiative aims to replicate the Petrobras model with minimal state participation.
Leonardo Durans said the debate on how to manage critical minerals is absolutely strategic.
US-Brazil-China Dynamics
The US government has interest in at least 50 critical minerals projects in Brazil worth billions of dollars.
The US gave a $565-million loan to Serra Verde, the only large-scale heavy rare earths producer outside Asia.
The deal includes an option for the US to acquire a minority stake.
Brazil's rare earths exports to China boomed in 2025.
Durans said Brazil's historical policy is to be friends with all countries from every bloc.
Political Divergence and Industry Pushback
Pro-Lula lawmakers introduced bills to create Terrabras.
“Brazil’s mining regulator chief said on Tuesday he expected a national policy for critical minerals to be unveiled within the next two to three months, adding that a proposalto create a state-owned companyfor rare earths was not a government initiative”
The mining regulator chief said the state-owned company proposal is not a government initiative.
Ibram said Brazil's weakness does not stem from lack of state involvement.
The government is in talks on a bill to create a national policy that does not include a state-run company.
Durans called the legislative proposal surprising.
Environmental and Social Challenges
Rare earth mining poses significant environmental and social challenges.
The national strategy must balance mineral sovereignty with environmental and social protection.
The creation of Terrabras represents a decisive step for Brazil.
Brazil seeks to position itself as a strategic alternative to Chinese dominance.
The country concentrates nearly 90% of the world's niobium reserves.
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