U.S. Investors Back Brazilian Mine, but China Retains Control Over Rare Earths

The Serra Verde mine in Brazil, supported by U.S. investors, is positioned to address a critical shortage of rare earth elements, yet remains bound to China for its product processing and sales, emphasizing the geopolitical challenges in resource management.

The expansive pit located near a small town in rural Brazil stands as a testament to the chance of solving the West’s escalating dilemma in sourcing critical rare earth minerals — essential components for electric vehicles, renewable energy technologies, and defense systems. Introduced last year and funded by American investors, the Serra Verde mine is the only significant producer of hard-to-obtain rare earth elements outside Asia.

However, the mine’s development faces a major hurdle: it is already obligated to sell virtually its entire output to China, the dominant player in rare earth processing. Thras Moraitis, the CEO of the mining company, elaborated on this predicament, stating, "They were the only customer who could process and separate the product." He attributes China’s prowess in this area to decades of strategic foresight, solidifying its stronghold over the rare earth supply chain.

The plight of the Brazilian mine starkly highlights the West's vulnerabilities regarding essential minerals that fuel modern economies and military technologies. China remains the preeminent force in the mining and processing of rare earths, a group of 17 elements crucial for industries including automotive, semiconductor, aerospace, and defense. Although these minerals are plentiful in the Earth's crust, their complex extraction and processing tasks have largely been relegated to China due to insufficient investment and infrastructure from the United States and other Western nations.