Brazil and the United States are giving clear signs of rapprochement to work together on the development of a critical minerals chain, a move that could accelerate the financing of projects in the segment.
“It is very important for Brazil to send signals that it is open to negotiating with the United States in the critical minerals segment, because this paves a major path for mining companies to raise funds from North American institutions to move forward with their projects in Brazil,” the CEO of a critical minerals company, which is developing a multimillion project in Brazil, told BNamericas, asking not to be identified in this article.
According to this executive, who said he is currently negotiating financing with the US institution International Development Finance Corporation (DFC) for his company’s project in Brazil, the majority of ventures related to critical minerals in the country are at early stages and belong to junior companies, which underscores the need for these projects to have as many financing options available as possible.
This week, representatives of the United States Congress met with the Brazilian government in an attempt to strengthen the relationship between the two countries, mainly for the development of the critical minerals chain. The delegation, with some United States congress members, met with representatives of Brazil’s Ministry of Mines and Energy (MME).
“The visit of the U.S. delegation addressed economic and geopolitical issues related to critical and strategic minerals, focusing on deepening knowledge about how Brazilian institutions operate and on identifying opportunities for bilateral cooperation in production chains considered essential for energy security and technological development”, said the ministry of mines and energy in a statement.
During the meeting, the MME’s national secretary for geology, mining, and mineral processing, Ana Paula Bittencourt, highlighted the importance of the exchange of knowledge and the building of international partnerships aimed at strengthening the Brazilian mining sector.
“Strengthening bilateral dialogue is essential to expand cooperation opportunities, attract investment, and consolidate Brazil as a strategic supplier of essential minerals for the energy transition,” said Bittencourt.
In another sign of rapprochement, executives from the rare earth mining company Serra Verde also recently met with representatives of the Brazilian government amid efforts to avoid the risk of rejection of the US$2.8 billion (bn) acquisition agreement signed with the US company USA Rare Earth (USAR).
In April this year, USA Rare Earth announced an agreement to buy Serra Verde, owner of the Pela Ema rare earths mine and processing plant in the state of Goiás. In addition to taking control of the company, the agreement also guarantees an exclusive 15-year offtake contract for USAR.
Weeks after the acquisition was announced, Brazil’s antitrust authority, Cade, opened an investigation to assess the details of the transaction. Behind the scenes in the mining sector, the measure was seen as a warning that the Brazilian government intends to thoroughly analyze all merger and acquisition transactions involving critical minerals.
The United States has a declared interest in developing critical mineral chains in countries considered more friendly to the country, in an attempt to reduce dependence on those minerals from China. Brazil, on the other hand, has large reserves of some of these minerals, mainly rare earths, niobium, lithium, and nickel, among others.
As part of this rapprochement, at the beginning of the month, President Luiz Inácio Lula da Silva visited the United States and, after a meeting with President Donald Trump, stated that Brazil is open to receiving foreign investment.
“Brazil itself needs to use this opportunity to diversify its partners in the mining sector, so as not to remain so dependent on China in the mining area, neither to finance its projects nor for its exports”, said the CEO.
(The original version of this content was written in Portuguese)