As Washington and Brasília mend diplomatic fences, the United States is quietly eyeing Brazil’s vast but untapped rare earth reserves as a strategic alternative to China’s dominance in the sector, according to reporting by the Financial Times.
Brazil holds the world’s second-largest reserves of rare earth elements—critical components in technologies ranging from electric vehicles and drones to advanced military systems. Yet the country has barely scratched the surface of its mineral wealth, hindered by funding shortages, complex bureaucracy, and long delays in permitting. The United States, still reeling from China’s export restrictions on rare earths amid trade tensions, has intensified its search for new sources and sees Brazil as a potential partner in reshaping the global supply chain.
The timing is politically charged. The Trump administration’s rapprochement with Brazil’s leftwing president Luiz Inácio Lula da Silva has opened a window for cooperation after a period of heightened tensions that included tariffs and sanctions. In recent months, bilateral relations have warmed, with Washington reversing some tariffs and easing sanctions on Brazilian officials. This thaw has coincided with a surge of interest from U.S. officials and investors in Brazil’s rare earth potential.
According to people familiar with the discussions, talks on a rare earths deal were still at an early stage by late 2025, with the United States signaling its interest privately. The Financial Times reports that U.S. diplomatic and commercial channels have been active, with the U.S. chargé d’affaires in Brazil, Gabriel Escobar, discussing rare earths with Brazil’s mining association Ibram and exploration companies. The U.S. Department of Commerce and Brazil’s trade ministry have also held talks on critical minerals.
The momentum is not limited to the United States. In Rio de Janeiro last week, European Commission President Ursula von der Leyen revealed that the European Union is also negotiating with Brazil on critical raw materials, including lithium, nickel, and rare earths. Europe’s move signals a broader scramble among global powers to secure mineral supplies outside China, which dominates both extraction and processing of these metals.
China currently controls about 60% of global rare earth extraction and more than 90% of processing capacity, according to the US Geological Survey. That monopoly has made Beijing a decisive player in global technology supply chains, and it is a vulnerability Washington is eager to reduce. Brazil, by contrast, holds 23% of global reserves and could emerge as a rare earth powerhouse if it can scale production. Industry veterans like Constantine Karayannopoulos have described Brazil’s endowment as “extraordinary,” suggesting the country could become a “rare earth superpower” if it can overcome its regulatory and financial hurdles.
The United States is prepared to back such a transition financially. Officials have discussed using public lenders such as the International Development Finance Corporation (DFC) and the Export-Import Bank to support Brazilian projects. The DFC has already approved a $465 million loan for Serra Verde, Brazil’s only operational rare earth mine, located in Goiás state. While much of Serra Verde’s output has been contracted to China, that agreement is due to expire this year, potentially opening new markets.
Another heavy rare earth project in Goiás, developed by Aclara Resources, received $5 million from the DFC for a feasibility study and aims to begin production by mid-2028, targeting Western buyers. The company’s CEO, Ramón Barúa, said engagement with U.S. government departments has been “amazing,” reflecting Washington’s urgency in securing new supply lines.
Despite the interest, Brazil’s mineral sector remains constrained. Only about 30% of the country has been thoroughly mapped for mineralogy, suggesting the actual reserves may be larger than currently known. Yet projects face long waiting periods for permits. The Serra Verde mine itself took 15 years to enter production, a timeline that could frustrate Washington’s desire for rapid diversification away from China.
Political analysts say the rare earths opportunity comes at a moment when U.S.-Brazil relations are fragile but improving. The rapprochement could be tested by tensions over Venezuela and other regional issues, yet many believe a deal is likely. Christopher Garman of Eurasia Group estimated a “75 percent” chance of a critical minerals agreement by early 2026, arguing that securing rare earths is a top priority for the Trump administration.
For Brazil, the potential deal could bring investment, jobs, and geopolitical leverage. For the United States, it could represent a rare chance to reduce reliance on China for minerals essential to the next generation of technology and defense systems. As both countries weigh the strategic and economic benefits, the outcome could reshape global supply chains and redefine the balance of power in the race for critical minerals.
