The US and others turn to Brazil for rare earths, raising environmental
concerns
[August 21, 2026] By
GABRIELA SÁ PESSOA, Associated Press / DIEGO JUNQUEIRA and ISABEL HARARI,
Reporter Brasil
SAO PAULO (AP) — In the global race to secure rare earths that are key
for everything from mobile phones to green technologies, Brazil is
emerging as an alternative to China's dominance, particularly for the
United States and Australia, according to an analysis of mining permits
by The Associated Press and Reporter Brasil.
That could boost the economy of Latin America’s largest and most
populous nation, which is second only to China in rare earth reserves.
Foreign capital is rushing in. Nearly half of the 2,727 overall rare
earth exploration applications — or 42% — in Brazil were made by
subsidiaries of foreign mining companies or firms with foreign ownership
stakes. Eleven of the 20 companies with the largest number of
applications are backed by foreign investment, mostly from Australia,
the U.S. and Canada.
The analysis reviewed all National Mining Agency records through June.
Rare earth exploration applications have surged, with more than 86%
filed in the past three years, including 268 in the first half of 2026,
according to the agency’s public data.
But the mining, which in some cases could happen near reserves in the
Amazon rainforest, also comes with major environmental risks. Indigenous
communities are beginning to sound the alarm. It also raises questions
about relations between the U.S. and Brazil, long trading partners, and
Brazil and China, which have become closer in recent years.
“Brazil’s rare earths are significant not just because of the sheer size
of the deposits," said Robert Muggah, co-founder of the Igarape
Institute, a Brazilian think tank, "but because they sit at the
intersection of resource nationalism, energy transition demand, Western
supply-chain diversification and competition with China’s rare earth
dominance.”
Rare earths are essential in digital and defense technologies, used in
electronics, magnets and batteries. They are also used in wind turbines
and electric vehicle motors, critical to the transition away from fossil
fuels like oil, gas and coal that cause global warming. The
International Energy Agency estimated in 2022 that demand for rare
earths could increase at least threefold by 2040.
The AP-Reporter Brasil analysis identified a wave of U.S. investment
after China last year restricted rare earth exports in response to U.S.
tariffs. That put tremendous pressure on U.S. companies, and many
experts believe it brought U.S. President Donald Trump back to the
negotiating table with Beijing.
The new U.S. investment has included the purchase of Brazil’s only
commercial rare earth producer, Serra Verde, by a firm in which the U.S.
government has a stake. The analysis also drew on corporate ownership
records compiled through Cruzagrafos, a platform developed by the
Brazilian Association of Investigative Journalism.
Future mining will carry environmental risks
At least 25% of the applications are to mine in areas that overlap with
or are located within 10 kilometers (6 miles) of 283 protected areas and
Indigenous territories, according to the Energy Transition Observatory,
a platform developed by Reporter Brasil, the nongovernmental Institute
of Socioeconomic Studies, and the PoEMAS research group for politics,
mining and the environment at the Federal University of Juiz de Fora.
The platform cross-references geolocation data from mining projects and
protected lands. Experts say mining projects within this buffer zone can
cause environmental damage.
Depending on what is mined, toxic chemicals can be released and
radioactive waste generated. Other potential impacts include
deforestation, air pollution, noise and polluted water seeping into
rivers and lakes, which can poison fish populations and sully drinking
water supplies.
The path from an exploration permit to commercial production can take
five to 10 years, requiring companies to submit technical studies and
exploration plans to the National Mining Agency and environmental
regulators. Projects affecting Indigenous territories must also undergo
consultation with the communities.
But rising demand has spurred efforts to speed approvals. Brazil’s
Ministry of Mines and Energy, under President Luiz Inacio Lula da Silva,
has discussed streamlining environmental licensing for strategic mining
projects. Sen. Flávio Bolsonaro, a leading candidate challenging Lula in
October’s election, has also proposed faster permitting for mining.
“Mining always leaves a footprint,” said Gilvan Magalhães, president of
the residents’ association of Familia Magalhaes, a small Afro-Brazilian
community in Goias state in central Brazil. Their territory with some 30
families overlaps with mining claims by the Canadian firm Aclara
Resources, which last year secured $5 million in project development
financing from the U.S. International Development Finance Corporation.
Aclara in a statement said its project initially overlapped with the
community’s territory, but “no mining activities will take place there."
Still, residents fear operations that could start as early as 2028 could
affect local springs and wildlife.
Australian and US firms lead mining requests
Australia, the U.S. and Canada offer investment mechanisms that reduce
risk in a sector where few prospects become profitable mines, said Julio
Nery, director of mining affairs at the Brazilian Mining Institute.
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A mine operated by Serra Verde Mining digs for rare earth
elements including neodymium, praseodymium, terbium and dysprosium,
which are essential for the production of permanent magnets, in
Minacu, Goias state, Brazil, July 28, 2025. (AP Photo/Eraldo Peres,
File)
 Of every 1,000 potential rare earth
prospects, only about 100 justify drilling and exploration. “And out
of those 100, you’ll end up with only two good projects. The success
rate is not very high,” Nery said.
Australian companies have taken a leading role in Brazil, accounting
for 695 mining applications. Nearly a third were filed by Borborema
Recursos Minerais, a subsidiary of the Sydney-based Brazilian Rare
Earths Pty Ltd.
“We recognize that the critical minerals environment at the moment
is quite concentrated,” Sophie Davies, Australia’s ambassador to
Brazil, told the AP in an interview without specifically referencing
China. “The challenge is where and how the markets are traded and
how minerals are produced.”
U.S. companies ranked second with 347 applications.
Alpha Minerals Brazil, controlled by Texas-based Rare Earth Americas
Inc., accounted for 181. Originally incorporated in the Cayman
Islands, the company moved to the U.S. in 2025 and says it is “on a
mission to become the premier new source of rare earth supply for
America.”
Other major filers include Mineracao Apollo, partly controlled by
Nevada-based Atlas Lithium, and Aclara, which recently opened a rare
earth separation pilot plant in Virginia. The company also plans to
build a commercial-scale rare earth separation facility in
Louisiana.
The US government offered up to $1.6 billion in support
In February, the only company producing rare earths in Brazil, Serra
Verde, secured a $565 million financing package from the U.S.
International Development Finance Corporation. In April, USA Rare
Earth announced an agreement to acquire Serra Verde for about $2.8
billion, three months after the U.S. Department of Commerce
announced plans to provide up to $1.6 billion in support to USA Rare
Earth. The department receives over 16 million shares in the deal,
finalized in June.
Serra Verde is the only producer outside Asia with capacity to
supply all four magnetic rare earth elements — neodymium,
praseodymium, dysprosium and terbium — essential to automotive,
medical, renewable energy, electronics, robotics, defense and
aerospace industries.
“The Western rare earth sector stands at a critical inflection
point, as governments and strategic industries urgently seek
reliable sources of critical rare earths — particularly scarce heavy
rare earths,” Thras Moraitis, CEO of Serra Verde Group, said in a
statement during the acquisition.
Leonardo Durans, a director at Brazil’s Trade Ministry overseeing
rare earth policy, said the country will not take sides in the
U.S.-China dispute.
China shows interest but projects lag behind
The AP-Reporter Brasil analysis showed that Chinese companies had
filed no rare earth mining applications in Brazil as of June, but
they have shown interest.
Mineracao Taboca, Brazil’s largest tin producer, was acquired last
year by state-owned China Nonferrous Metal Mining Group, which
operates a cassiterite mine in the Amazon rainforest and has
announced plans to study rare earth potential in the area.
Also last year, Shenghe Resources Holding signed a memorandum of
understanding with Brazilian companies WEG Mineracao and Fenrir do
Brasil to pursue rare earth opportunities. Fenrir has a mining
project in Minas Gerais, a state in the southeast, focused on the
exploration of elements including rare earths.
China's rare earth reserves still are thought to be double what
Brazil might have. China has an estimated 44 million metric tons,
according to the U.S. Geological Survey, while Brazil has an
estimated 21 million metric tons, according to its Geological
Service.
“The challenge today is that China dominates processing and
refining,” said Brazilian lawmaker Zé Silva, author of pending
legislation that would establish a federal policy on critical
minerals and rare earths, set investment priorities and create a
national council to monitor significant foreign influence in the
sector. “Under our proposal, companies are welcome to invest, but
they must transfer technology to Brazil, including processing
capacity.”
On Monday, Brazil's president said the Senate would move forward
with the proposed law, to keep mining-related jobs in the country
and defend national interests.
“We will not allow anyone from outside to come here and exploit our
mineral resources, because we want their processing and
transformation to happen here,” Lula said.
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