Forging an Unlikely Alliance, How a US-Brazil Rare Earths Deal Could Reshape Global Geopolitics

Forging an Unlikely Alliance, How a US-Brazil Rare Earths Deal Could Reshape Global Geopolitics

In the dense, sprawling expanse of the Brazilian Amazon in 1967, a helicopter from U.S. Steel carrying a team of geologists made an unplanned landing. This serendipitous event led to the discovery of the Carajás mineral province, one of the richest troves of iron ore on the planet, fundamentally altering the global mining landscape and cementing a chapter of U.S.-Brazil industrial collaboration. Today, over half a century later, the stage may be set for a new, equally consequential partnership, born not from accidental discovery but from urgent geopolitical necessity. As the United States scrambles to break China’s stranglehold on the critical minerals that power the modern world, an unlikely ally has emerged: Brazil. This potential alliance between the administrations of Donald Trump and Luiz Inácio Lula da Silva—two leaders with starkly contrasting worldviews—could redraw the global map for strategic resources and foil China’s carefully laid mineral dominance game.

The Geopolitical Crucible: China’s Weaponization of Rare Earths

The urgency of this potential partnership stems from a single, inescapable reality: China’s near-total dominance of the global rare earths supply chain. These 17 metallic elements, with names like neodymium, praseodymium, and dysprosium, are the unsung heroes of modern technology. They are essential for the powerful permanent magnets in electric vehicle motors and wind turbines, the vibrant screens of smartphones, the guidance systems of precision missiles, and a vast array of defense and consumer electronics. Despite their name, rare earths are relatively abundant in the Earth’s crust, but they are notoriously difficult and environmentally hazardous to mine and process economically.

Over the past three decades, China pursued a deliberate, state-backed strategy to corner this market. By leveraging lower labor costs, less stringent environmental regulations, significant state subsidies, and a long-term industrial vision, China systematically outpaced and outcompeted other producers. Today, it controls approximately 60-70% of global rare earth mining and a staggering 85-90% of the complex refining capacity, effectively making the entire world dependent on Beijing for these technological linchpins.

This dependency became a glaring vulnerability during recent trade tensions. In response to new tariffs from the Washington, Beijing demonstrated its willingness to weaponize this dominance by threatening to restrict exports. This move, akin to turning off the tap for the global tech and green energy industries, sent shockwaves through capitals and corporate boardrooms worldwide. It underscored a harsh truth: economic competition in the 21st century is inextricably linked to control over critical resources. For the United States, which views this dependency as a critical national security risk, finding an alternative has become a strategic imperative.

An Unlikely Convergence of Interests

The geopolitical friction between Washington and Beijing has created a unique opening for other nations with significant mineral potential. Countries like Australia, India, and Brazil suddenly find themselves in an enviable position. For the United States and Brazil, in particular, this crisis has revealed a rare and powerful area of shared interest that transcends their governments’ profound ideological differences.

The Trump administration, with its “America First” ethos, is aggressively pursuing a strategy of “friend-shoring”—shifting supply chains away from geopolitical rivals and towards allied nations. Rebuilding a domestic mining industry is a key part of this plan, but it is a long, arduous process fraught with regulatory and environmental hurdles. The U.S. needs reliable, friendly partners, and it needs them quickly.

Enter Brazil, a country that perfectly fits this strategic need. It is a democratic nation in the Western Hemisphere, geographically close to the U.S. compared to other suppliers. More importantly, it is a recognized mining powerhouse and is sitting on the world’s largest reserves of rare earths, second only to China’s. For decades, Brasília has spoken of formulating a critical minerals strategy, but these plans have largely remained on the drawing board, hampered by a lack of capital, technology, and a compelling market incentive. A strategic alliance with the United States, its largest foreign investor, could provide the catalyst Brazil needs to finally unlock its subterranean wealth.

For Brazil’s leftist President Lula, the calculus is equally compelling, albeit more complex. On one hand, he leads a nationalist Workers’ Party that is deeply suspicious of U.S. influence and has historically fostered a strong relationship with China, which is now Brazil’s largest trading partner. On the other hand, the rare earths opportunity aligns perfectly with his government’s ambitions for a new industrial policy. Lula does not want Brazil to be a mere exporter of raw ore; he wants to build a full-fledged industrial ecosystem, encompassing refining, magnet manufacturing, and ultimately, high-tech end-products. A partnership with the U.S. could provide the investment and technology transfer needed to build this vertically integrated industry within Brazil, creating jobs and adding immense value to its economy.

Furthermore, the rare earths card presents a powerful bargaining chip for Lula. He could leverage this strategic cooperation to persuade the Trump administration to lift the steep tariffs on Brazilian steel and aluminum announced in July. A deal that secures critical minerals for the U.S. in exchange for fairer trade terms and support for Brazilian industrial development is one that both leaders could tout as a major victory.

The Blueprint and the Precedent: Niobium as a Cautionary Tale

The potential for such a partnership is not merely theoretical; Brazil has a proven track record of dominating a critical mineral market. The country accounts for about 90% of the global production of niobium, a metal essential for creating stronger, lighter steel alloys used in everything from automotive frames and jet turbines to bridges and smartphone casings. This dominance was not achieved overnight. It was built over decades by a single private Brazilian company, CBMM (Companhia Brasileira de Metalurgia e Mineração), which methodically developed the entire supply chain and advanced the applications for the metal.

The story of niobium, however, also serves as a stark cautionary tale for U.S. strategists. Back in 2011, recognizing the strategic importance of niobium, a consortium of Chinese, Japanese, and South Korean groups proactively purchased a 30% stake in CBMM. This move strategically placed them at the source of this critical supply chain over a decade ago, far ahead of any potential U.S. competition. The niobium example demonstrates two things: first, that Brazil possesses the capability and resources to become a global leader in strategic minerals, and second, that competitors like China are already well-aware of this potential and have been strategically positioning themselves for years. The window of opportunity for the U.S. is open, but it may not remain so indefinitely.

Navigating the Pitfalls: Nationalism and Strategic Autonomy

For this ambitious partnership to materialize, both sides must navigate significant political and ideological landmines. President Lula will have to tread carefully to avoid the perception that he is simply swapping dependence on China for a new form of dependence on the United States. His political base and the nationalist factions within his Workers’ Party will not tolerate an arrangement that resembles the exploitative “neo-imperialism” they often decry. The ghost of past U.S. interventions in Latin America still looms large in the regional political consciousness.

To assuage these fears, the partnership must be structured as a genuine collaboration, not an extraction-based venture. As suggested by Fernando Landgraf, a critical minerals expert and professor at São Paulo University, the ideal model would be a joint venture to refine rare earths in Brazil. “It would be very interesting if the US were interested in a joint venture to refine rare earths in Brazil, adding more value here,” Landgraf stated. This model aligns with Lula’s industrial goals and provides a tangible benefit to the Brazilian economy, moving beyond the colonial-era pattern of exporting raw materials.

From the U.S. perspective, the primary objective is to secure a stable, non-Chinese supply chain. Whether the refining and initial manufacturing happen in Texas or in Bahia is a secondary concern, though building capacity within a friendly allied nation is a strategically sound outcome. Furthermore, such a collaboration would serve the dual purpose of subtly pulling Brazil closer into the U.S. strategic orbit, providing a counterweight to Beijing’s growing economic and political influence in South America.

A Foundation for Cooperation

Despite Brazil’s legendary bureaucracy, it remains one of the most open destinations for foreign direct investment in the developing world, including in its strategic sectors. American companies with established Brazilian subsidiaries can even qualify for financing from the powerful national development bank, BNDES (Banco Nacional de Desenvolvimento Econômico e Social), which is currently seeking to back 56 projects focused on strategic minerals. Brazil’s successful development of other energy-transition metals, including significant nickel, copper, graphite, and lithium projects, further bolsters its credentials as a reliable and capable mining partner.

Of course, mineral diplomacy is just one item on a complex and often contentious bilateral agenda. The two nations have differing views on Venezuela, the expansion of the BRICS bloc, the crisis in Haiti, and Brasília’s tough regulatory stance against Big Tech companies and ethanol imports. Yet, the rare earths opportunity stands apart. It is a subject where cold, hard strategic and business interests align so perfectly that they can potentially overcome ideological animosity.

The potential US-Brazil partnership on critical minerals is more than a simple trade deal; it is a geopolitical maneuver of the first order. It represents a pragmatic recognition that in a world of renewed great power competition, supply chains are battlefields. By joining forces, the United States and Brazil have a chance to create a democratic, resilient alternative to China’s mineral monopoly. Just as the accidental discovery at Carajás reshaped the global iron ore industry half a century ago, a deliberate and strategic partnership today could empower the West, fuel the green transition, and ensure that the technologies of the future are not held hostage to the geopolitics of the present.

Q&A: The US-Brazil Rare Earths Partnership

Q1: What are rare earths and why are they so strategically important?

A1: Rare earths are a group of 17 metallic elements crucial for manufacturing modern technologies. They are essential components in the powerful magnets used in electric vehicle motors and wind turbines, the screens and speakers of smartphones, defense systems like jet engines and missile guidance systems, and many other high-tech applications. Their strategic importance lies in their irreplaceability for the green energy transition and advanced electronics, making control over their supply a matter of national and economic security.

Q2: Why is the United States so keen to find an alternative to China for rare earths?

A2: China currently dominates the global rare earths supply chain, controlling the majority of both mining and, most critically, the complex refining process. Recent trade tensions have demonstrated that Beijing is willing to weaponize this dominance by threatening export restrictions. This creates a severe vulnerability for the U.S., potentially allowing China to disrupt American tech, automotive, and defense industries. Reducing this dependency is a top national security priority for Washington.

Q3: What does Brazil gain from a potential partnership with the US on rare earths?

A3: Brazil stands to gain significantly. Despite having the world’s second-largest reserves, its rare earths industry is underdeveloped. A partnership with the U.S. could provide:

• Investment and Technology: The capital and advanced technology needed to kickstart a full-scale mining and processing industry.

• Industrial Development: Support for building domestic refining and magnet manufacturing capacity, aligning with President Lula’s goal of moving beyond raw material exports to higher-value production.

• Leverage: A powerful bargaining chip to negotiate the removal of U.S. tariffs on Brazilian steel and aluminum.

Q4: What are the main obstacles to this US-Brazil alliance?

A4: The primary obstacles are political and ideological:

• Political Ideology: The governments of Donald Trump and Lula da Silva have deeply divergent worldviews, creating inherent friction.

• Brazilian Nationalism: Lula’s Workers’ Party is historically suspicious of U.S. influence and would reject any deal perceived as exploitative or reminiscent of “imperialism.”

• Existing China Ties: China is Brazil’s largest trading partner, and a closer alignment with the U.S. on a strategic issue could complicate this crucial economic relationship.

Q5: How does Brazil’s dominance in Niobium illustrate both the potential and the pitfalls of such a partnership?

A5: Brazil’s control of roughly 90% of the global niobium market, largely through a single company, CBMM, demonstrates its proven capability to become a world leader in a critical mineral. This success story is a blueprint for what could be achieved with rare earths. However, it also serves as a cautionary tale; in 2011, Chinese, Japanese, and South Korean consortia bought a significant stake in CBMM, securing their supply years in advance. This shows that while the opportunity for the U.S. is real, global competitors are already strategically positioned, and delay could be costly.