In May 2026, during a meeting at the White House, Presidents Lula and Trump placed rare earth elements at the center of their discussion, following months of meetings between Brazilian and U.S. technical experts. That same week, the Chamber of Deputies approved the creation of the National Policy on Critical and Strategic Minerals (PNMCE), a bill that still requires Senate approval and which the government presents as a milestone capable of reshaping Brazil’s role on the global stage.
The reason for all this interest lies in the properties of these elements: rare earths are a group of 17 metals that, despite their name, are not scarce in the Earth’s crust; the challenge lies in finding them in viable concentrations and separating them, a costly and complex process.
These metals have unique chemical characteristics that no other material can replace with the same efficiency. They are found in almost everything: electric car motors, wind turbines, batteries, cell phones, screens, and even military equipment. Because the modern world depends so heavily on them, rare earth elements have become a central issue in disputes between countries.
The problem is not a shortage of these minerals on the planet, but rather the fact that everything goes through China, which extracts about 70% of the world’s rare earth elements and processes more than 90% of them, according to data from the U.S. Geological Survey (USGS). This gives the country enormous control over this market, which may pose a threat to other nations.
To avoid relying solely on China, other countries have set out to find new suppliers. That’s where Brazil comes in.
Brazil at the center of the dispute
The country holds the world’s second-largest reserve of rare earth elements, about 21 million metric tons, second only to China. Most of these reserves are found in a type of soil called ionic clay. This material is easier and cheaper to extract, and causes less damage to the environment.
This potential is already attracting capital: an American company purchased the mining firm Serra Verde, in Goiás, for $2.8 billion, and Russia’s Rosatom and China’s CNMC have also closed deals in the sector, a sign that the country may move beyond exporting raw materials to become a key player in a high-value-added supply chain.
It was precisely this scenario that was at the heart of the conversation between Lula and Trump. According to Lula, Brazil is willing to share its potential in critical minerals with any country interested in investing, a position that still depends on how it will be negotiated in practice. He also presented Trump with the legal framework recently approved by the Chamber of Deputies, a move interpreted as an attempt to convey legal certainty amid the dispute with China.
Bill 2780/2024 establishes a guarantee fund with an initial contribution of R$ 2 billion from the federal government to unlock credit for mining projects, in addition to R$ 5 billion in tax incentives to encourage the processing of these minerals within the country, rather than simply exporting the raw material. The issue is likely to remain on the agenda in the coming months as the bill moves through the Senate, where it may undergo changes, and Brazil seeks to consolidate its position in a dispute that already involves other countries.
For a country with the world’s second-largest reserves, the way this policy is implemented could determine whether Brazil will continue to export only raw materials or succeed in adding value to a resource that is increasingly strategic for the global economy.
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