China's dominance in the field of critical minerals and the United States' frantic efforts to search for minerals globally have made the European Union restless. So they turned their attention to Brazil.
According to the Hong Kong 'South China Morning Post' report on June 26, Jozef Sikela, a member of the EU's committee responsible for international partnership affairs, is currently visiting Brazil for a one-week stay. On the 25th, he stated that the EU has offered Brazil a key mineral cooperation plan that is 'more advantageous' than those offered by China and the United States, promising to invest in the country's refining and technology capabilities.
Xikela argued that the EU's cooperation model has advantages, as it prioritizes commercial sustainability and the local processing of rare metals. This is in line with the Brazilian government's policy of promoting the export of processed minerals rather than raw minerals.
"It is very important that Brazil also move away from low-value-added business models and create value domestically." Siqueira presented Brazil as the EU's most important strategic partner in Latin America, stating that the EU could meet its own needs through underwriting agreements, while supporting Brazil in building its own refining capabilities, enabling it to gradually upgrade to higher-value-added supply chains.
On June 25 local time, Joseph Sikela, Commissioner for International Partnerships of the European Union, attended the opening ceremony of the EU-Brazil Investment Forum and delivered a speech. Social Media
Brazil has the second-largest reserves of rare earths in the world, but its industrial chain is still in its initial stage. To establish a complete industrial chain, Brazil has set domestic processing as a prerequisite for foreign investors to obtain mining rights.
Brazilian President Lula stated during his visit to the United States in May that Brazil would not repeat the same mistakes. Brazil is willing to export gold, silver, and iron ore as raw materials without obtaining industrial value added. Brazil is open to cooperation with any country that operates mining, separation, and processing of key minerals within its territory.
However, the MagBras project supported by the Brazilian government has a total budget of only 73 million reais (approximately 95.8 million yuan). Currently, it only produces magnets on a pilot basis, which indicates a significant gap compared to China. China has a significant advantage in the fields of rare earth separation and refining. According to data from the International Energy Agency, China controls approximately 91% of the global production capacity for rare earth separation and refining, and its share in the production of permanent magnets continues to rise, reaching 94%.
However, Western countries, who are actively searching for mineral resources worldwide, have set their sights on Brazil. The only rare earth producer in Brazil, Serra Verde Group, terminated its long-term supply contract with Chinese buyers in December last year. Two months later, it reached a financing agreement worth $5.65 billion with the United States Foreign Development Finance Corporation (DFC), which includes potential arrangements for the U.S. government to acquire minority shares in the company.
After the United States, the European Union has also started to take notice. The South China Morning Post reported that Siqueira's visit has made the European Union a third important participant in the competition for Brazil's rare earth resources, following the US and China.
On the 23rd of this month, Xiqueira met with officials from the Ministry of Mines and Energy in Brasília. Both sides discussed financing mechanisms and the memorandum of understanding that is still under negotiation. Negotiations also took place regarding cooperation in hydrogen energy and energy infrastructure. He also pointed out that projects involving nickel and lithium are also a focus of the EU's attention. The EU’s "Global Gateway" strategy and the Partnership Mechanism for Key Raw Materials will become future investment tools, he emphasized.
On the 20th, Xiqueira also visited a rare earth research and processing center located in Posusdi Kaldas, Minas Gerais. This facility is operated by the Australian mining company Vilirdis Mining and is one of four priority cooperation projects selected by the EU and Brazil. The aim of this project is to accelerate collaboration between the two sides in the field of critical minerals.
Xikaila gave positive reviews of this project. The project plans to invest $360 million in the construction of a commercial factory. The pilot project, which started production in May this year, can process about 100 kilograms of ore per hour. The overall project is expected to produce 15,000 tons of mixed rare earth carbonates annually starting from 2028.
Xikeira specifically mentioned a non-binding letter of intent signed between Viridis Mining and the Belgian Solvay Group, which concerns the supply of carbonates. In the future, it is possible that this agreement will expand to include broader cooperation involving processing technologies.
Virides Mining CEO Rafael Moreno said that the agreement with Solvay could be finalized by the end of July, and negotiations with the EU regarding the project's support have also made progress.
However, Moreno is cautious about the pace of Brazil's mining development. On the 23rd, he warned at an investment forum in Brasília that it will take time for Brazil to establish a complete industrial chain for mining, processing, and refining.
China took 20 years to get its industrial chain up and running, rather than two months. He said that Brazil needs to push forward at the right pace, without delay, in order to become a global growth leader in the field. Moreira believes that Brazil still needs to prioritize mining link development because there is insufficient mineral supply. Magnet manufacturers and separation factories won’t enter the country. The business model must start with mining industry.
