It happened in October, but it went unnoticed by the general public so far: the United States enhanced its investment in Brazil mines capable of dealing with the supply of rare earths and critical minerals that dominates with iron fist Asia. At that time, Trump was only a presidency candidate, and global trade, and that of China and the United States in particular, followed the monotony of those days. What happened a few months later we already know, and when Washington has come to “her” Mina in Brazil, he has encountered a surprise.
Context: a unique mine. The Serra Verde mine, located in the Brazilian state of Goiás, is currently the only active producer outside China that extracts heavy strange earth from ionic clay, a easier type of deposit to process than the hard rock, since it does not require crushing. These minerals, essential for the manufacture of permanent magnets used in electric vehicles and wind turbines, have turned this mine into a key piece within the MSP strategy led by the United States.
With the start of commercial production and the announcement in October of a round of US financing for 150 million dollars, with contributions from Denham Capital, Energy and Minerals Group and Vision Blue, Serra Green began to position himself as a crucial actor in the race to reduce the western dependence of China. Its executive director, Moraitis thras, stressed then that these funds would allow the company to reach a scale to compete economically in a market distorted by low Chinese production costs.
But there was a problem.
The paradox and the Chinese domain. After the months of that operation, in the heart of the Brazilian municipality of Minaçu, an old mining region of Asbestos in the center of the country, a huge pit has already been opened that contains, according to experts, that possible solution to the urgent problem facing the West: access to heavy rare earths, the strategic minerals indispensable to manufacture all types of critical technologies.
As we said at the beginning, the green serra mine, mostly backed with US capital (and to a lesser extent), is currently the only one outside Asia that produces significant amounts of some of the rare earths most difficult to obtain. However, the geopolitical potential of this operation has been immediately tied to a structural paradox: its entire production is already contractually compromised … to China, the only country that has the technical and industrial capacity to separate and process the heavy elements extracted from that clayey earth.
The Beijing Monopoly. The case of Serra Verde is not an anomaly, but the reflection of carefully cultivated hegemony. China dominates not only extraction, but especially the processing of the 17 known rare earths, essential for automotive, aerospace, electronic and military industries. Although these elements abound in the earth’s crust, their separation is technical and economically complex, and for decades the West relegated that task to China.
In the particular case of heavy rare earths, which include elements such as Disposio and Terbio, China practically has the global monopoly of separation and refinement. The situation is such that, even when Western countries discover viable deposits, such as Serra Verde in Brazil, they lack infrastructure and industrial knowledge to process them. China, thanks to long -term planning, is now in an unsurpassed position, even in the middle of the growing commercial tensions. Its agreement with almost any mine comes long because it is a fundamental part of the process of exploitation of these lands.
A critical block. Interest in Brazil as an alternative provider is not new, but urgent. Since in 2010 China interrupted its exports of rare earths to Japan for a territorial dispute, the world has become aware of its vulnerability in this area. As we said, Denham Capital, a private investment firm based in Boston, was one of the first to bet on Brazil that same year, financing the Serra Verde project.
However, for the next eight years, the project had difficulties to take off due to a fundamental lack: outside of China, no one could really refine the materials that the mine would extract. Thus, at the time he finally managed to inaugurate, after fourteen years of work and that additional investment of 150 million dollars in October, the paradoxically mine had already sold its production to China until at least 2027. Its executive director, Moraitis thras, admitted that, although now they all want their minerals, they cannot do anything: the contracts are signed and the materials already have a destination assured.
Long -term response. In addition, Serra Verde is not the only example of this unit. MP Materials, another company backed by the US government, extracts and separates light rare earth in California, but, again, until recently it sold 80% of its production to China, since it could not process the heavy elements either. The New York Times counted that a plant is currently being built in the same state, financed by the Pentagon, one that in the future can perform this task, like other projects in progress in France and Estonia.
However, all these initiatives will take years to materialize. Even if they are completed according to the planned deadlines, access to new heavy rare land deposits will continue to be very limited. The green serra herself expects to produce just a few hundred tons of these critical minerals by 2027, which, if concrete, would double the offer outside Asia. The rest of the international supply currently comes from marginal sources, such as carbon and uranium by -products, which, once again, underlines the urgency of the problem.
Strategic advantage. Thus, China’s consolidation as an indisputable power in this sector does not seem the result of chance, but of a sustained industrial vision for decades. While the United States and its allies just begin to react to the severity of the matter, Beijing has built not only technical capacity, but also the supply chain and contractual links that guarantee control.
Moraitis had in the Times that there is nothing more to recognize the obvious: the strategic planning of the Asian nation has been remarkably effective, and compete against it will be tremendously difficult. Meanwhile, the rare earths that could support the technological autonomy of the West continue their way to the it isreinforcing a dependency that becomes more difficult to reverse with each ton extracted from the Brazilian soil … paid in dollars.
Image | Green Serra
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