Brazilian rare earths industry and non-Chinese rare-earth supply chain: Brazilian rare-earth projects and policy support could strengthen a non-Chinese supply chain

Overview

This conference-takeaways report examines Brazil's emerging role in rare earths through project updates from local developers and an industry primer. Goldman Sachs argues that Brazil's resource base, policy incentives and push into refining could make it an increasingly important non-Chinese rare-earth supply-chain hub, while execution, permitting, financing and separation capability remain decisive constraints.

Core views

Goldman Sachs frames Brazil as an increasingly important rare-earth supply-chain candidate in the Western Hemisphere. The report notes that Brazil has the world's second-largest rare-earth reserves and highlights the September 2026 National Policy on Critical and Strategic Minerals, Law No. 15,506/2026. The policy combines a BRL2 billion Mineral Activity Guarantee Fund with tax credits through 2034 and is designed to favor domestic beneficiation over raw-ore exports. At the same time, the new CIMCE interministerial council must screen corporate-control changes, certain international offtake agreements and transactions involving mineral rights. The report therefore sees a sovereign shift from passive resource ownership toward domestic processing, but also notes that added state oversight can affect transaction and offtake execution. The project discussions illustrate different routes to production. Brazilian Rare Earths' Monte Alto hard-rock project in Bahia is at scoping-study stage, with a stated US$6 billion NPV, approximately US$970 million capex and downstream start-up targeted by 2031. The study contemplates 5.3ktpa of NdPr at an 11.3% TREO grade, around three times the grade cited for Lynas and MP Materials, and a US$21/kg NdPr-equivalent cash cost versus a reported US$110/kg spot NdPr price. The project also includes uranium yellowcake potential. Management's planned route is simple mine-site processing, ore sorting and dry separation, followed by downstream treatment in Camaçari; concentrate sales could precede downstream start-up by two to three years. However, uranium content adds permitting complexity, and current Brazilian rules limit uranium sales to the government under a cost-plus arrangement, although a possible pricing-mechanism change was discussed. Meteoric Resources' Caldeira ionic-clay project is described as having a US$1 billion NPV, US$500 million capex, a 25-year mine life and targeted start-up in 2H28. The company reported 1.6Bt of resources, 230Mt of reserves, a 0.4% grade described as the highest globally for an ionic-clay deposit, and 80% pilot-plant metallurgical recovery. Expected output is 3.7ktpa of NdPr plus 122tpa of DyTb, at a US$27/kg NdPr cash cost including by-products. It has secured 90% of production through three offtake agreements with Neo Performance, Ucore and POSCO, while pricing is still being finalized. Meteoric completed its DFS in July 2026, expects an installation license by October 2026 and an FID in 4Q26, with a targeted 60/40 or 70/30 debt/equity funding structure. Its strategy to separate material in Brazil could capture greater margins and align with policy incentives, but it depends on partnerships, financing, licensing and successful heavy-rare-earth separation. Viridis Mining's Colossus ionic-clay project has completed its DFS and targets 2028 start-up. The report cites a US$1.2 billion NPV, US$450 million capex, 25-year mine life, 2.8ktpa NdPr production and US$15.3/kg NdPr cash cost. Its 200Mt reserve and 473Mt resource base, 80% pilot-plant recovery, advanced procurement and partnership with Solvay are presented as key project supports. The environmental license was obtained in December 2025, construction-license approval is expected in 4Q26 and an operating license in 2H28. Equity funding of US$154 million was complete versus US$135 million required, while US$315 million of debt support was expected in the near term. The report identifies social licensing as a consideration because the mine is near communities, although management cited prior regional mining activity and plans to hire more than 80% of its workforce locally. The industry primer argues that rare earths are geologically widespread but commercially scarce because separating chemically similar elements is exceptionally difficult. Nd, Pr, Dy and Tb dominate project economics: the four can account for 80-95% of revenue in a typical development-stage project despite representing only 20-25% of contained tonnes. NdPr alone accounts for roughly 45% of rare-earth demand, driven by magnet demand. Dy and Tb are particularly valuable because they preserve NdFeB magnet performance at high temperatures in EV traction motors and defense applications. The report emphasizes that a project's heavy-to-light rare-earth mix is often more important than headline tonnage. Goldman Sachs distinguishes hard-rock deposits from ionic adsorption clays. Hard rock generally has higher grades of 1-10% TREO but requires crushing, grinding, flotation and high-temperature chemical cracking; it can generate radioactive thorium- or uranium-bearing residues and is typically light-REE dominant. Ionic clay deposits have much lower grades, commonly 0.03-0.4% TREO, but can use ambient-temperature ammonium-sulfate leaching and produce high-grade mixed rare-earth carbonate with lower fixed infrastructure requirements. They tend to be enriched in Dy, Tb and Y. In Brazil, however, management commentary cautions that in-situ leaching is unlikely to be permitted because of water and environmental scrutiny. Low grades can therefore raise strip-ratio, filtration and water-treatment challenges, limiting the apparent processing advantage of ionic clays. The report identifies midstream separation as the supply chain's main bottleneck. Individual rare earths require lengthy sequences of binary separations, potentially involving hundreds to thousands of mixer-settler stages, proprietary reagent chemistry and orebody-specific flowsheets. Heavy-rare-earth separation is even more difficult because feed concentrations are lower and purity specifications are tighter. China controls more than 90% of global refining capacity and manufactures more than 94% of critical NdFeB permanent magnets, while accounting for approximately 60% of global rare-earth mine output in 2025. This concentration makes refining and magnet production, rather than mining alone, the strategic chokepoints. The report describes a more policy-administered market structure following Chinese export restrictions. China introduced an export-licensing regime in April 2025 covering seven medium and heavy rare earths and related materials; proposed October 2025 measures covering five additional elements and a 0.1% de minimis extraterritorial rule remained suspended under a diplomatic truce due to expire on November 10, 2026. The core April licensing requirements remained in force, contributing to delays and case-by-case reviews. The resulting non-Chinese price premium has encouraged Western interventions, including the US Department of Defense's 10-year US$110/kg NdPr price floor for MP Materials, US$400 million convertible preferred-equity investment for a 15% stake, and a 10-year, 100% offtake commitment for MP's planned 10X magnet facility. Goldman Sachs concludes that diversification efforts across Australia, the United States and Latin America are continuing, but fully integrated mine-to-magnet capacity will take time to establish and displacing China will be particularly difficult in heavy-rare-earth processing.

Analysis framework

The report combines management commentary from Brazil Rare Earths Day with project-level data on reserves, grades, recoveries, costs, capex, funding, permitting and timelines. It then places those projects within a value-chain analysis of mining, separation and magnet manufacturing, and uses supply-demand, policy and market-structure evidence to explain the strategic importance of non-Chinese rare-earth capacity.

Methodology notes

• Industry AnalysisUpstream-Midstream-Downstream Transmission

  Rare-earth value-chain analysis

  The report follows material from upstream ore extraction through midstream separation and downstream magnet production to show why refining and metallization, rather than mining alone, determine strategic value and supply risk.

• Industry AnalysisSupply-demand framework

  GS Rare Earth NdPrO supply-demand model

  Goldman Sachs uses projected magnet demand and regional supply to frame medium-term rare-earth market balance, with EVs, wind power and other magnet applications supporting demand.

• Valuation methodsDCF (Discounted Cash Flow)

  Project NPV and policy-sensitive DCF assumptions

  The report cites project NPVs and states that policy and regulatory assumptions have become more important than traditional geological or operational variables in rare-earth discounted-cash-flow analysis.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Brazilian Rare Earths (ASX: BRE)

  Project developer advancing the Monte Alto hard-rock rare-earth project in Bahia.

  Strengths

  High reported 11.3% TREO grade, first-quartile cash-cost positioning, infrastructure proximity and potential uranium by-product credits.

  Weaknesses

  Early-stage project with scoping study published in August 2026.

  Comparison

  The report cites a grade around three times that of Lynas and MP Materials and notes that concentrate sales could create an earlier cash-flow route than for ionic-clay projects.

  Risks

  Uranium-related permitting complexity, funding needs, processing execution and uncertainty around uranium sales rules.

• Meteoric Resources (ASX: MEI)

  Project developer advancing the Caldeira ionic-clay rare-earth project in Brazil.

  Strengths

  0.4% grade described as the highest globally for ionic clay, 80% pilot recovery, 25-year mine life and 90% of output under three offtake agreements.

  Weaknesses

  Financing, permitting and local separation plans remain in progress.

  Comparison

  Its ionic-clay route avoids much of the hard-rock cracking process but faces low-grade material-handling and filtration challenges.

  Risks

  Installation-license timing, FID and financing execution, offtake pricing finalization and separation capability.

• Viridis Mining and Minerals (ASX: VMM)

  Project developer advancing the Colossus ionic-clay rare-earth project in Minas Gerais.

  Strengths

  DFS completed, 80% pilot recovery, US$15.3/kg NdPr cash cost, advanced procurement, completed equity funding and Solvay separation partnership.

  Weaknesses

  Construction and operating approvals, debt financing and downstream processing remain to be completed.

  Comparison

  The project is positioned as a relatively advanced Brazilian ionic-clay development with a targeted 2028 start-up.

  Risks

  Construction-license approval, debt funding, social licensing near communities and execution of separation and offtake arrangements.

• MP Materials (MP)

  Example of US state-backed rare-earth market-making and downstream magnet-supply support.

  Strengths

  US DoD support includes a 10-year US$110/kg NdPr floor, US$400 million preferred-equity investment and a 10-year offtake commitment for the planned 10X magnet facility.

  Comparison

  The report presents the arrangement as a template for critical-mineral financing rather than as direct coverage.

Key data

• Brazilian Rare Earths Monte Alto NPVUS$6 billionScoping-study-stage hard-rock project.
• Monte Alto NdPr production5.3ktpaExpected production with 11.3% TREO grade and US$21/kg NdPr-equivalent cash cost.
• Meteoric Caldeira NPVUS$1 billionIonic-clay project with targeted 2H28 start-up.
• Meteoric Caldeira NdPr output3.7ktpaAlso targets 122tpa of DyTb and US$27/kg NdPr cash cost including by-products.
• Viridis Colossus NPVUS$1.2 billionDFS-completed ionic-clay project targeting 2028 start-up.
• Viridis Colossus cash costUS$15.3/kg NdPrTargeted cost for 2.8ktpa NdPr production.
• China refining capacity sharec.90%Share of global rare-earth separation and refining capacity cited by the report.
• US DoD floor price for MP Materials NdPrUS$110/kgTen-year price-floor commitment described as a modified contract-for-difference mechanism.

Impact & implications

The report indicates that rare-earth value is increasingly shaped by secure access to separation, metallization, offtake and policy support rather than by mine ownership alone. Brazil's projects could add diversified supply, especially of magnet rare earths, but their strategic contribution depends on timely licensing, financing, local processing capability and the ability to produce high-purity separated products.

Risks

• Permitting can be more complex for projects with uranium or thorium, including monitoring and radioactive-residue requirements.
• Brazilian ionic-clay projects may face filtration, low-grade material handling, water-treatment and environmental constraints if in-situ leaching is not permitted.
• Achieving the very high purity required for local rare-earth separation requires technology transfer, specialized expertise and orebody-specific process optimization.
• Project timelines depend on licenses, FID, debt and equity financing, construction execution and binding offtake arrangements.
• China's processing dominance and export controls can constrain availability and increase price premiums for non-Chinese buyers.

What to watch

• Late-2026 resource updates, feasibility progress and permitting milestones for Monte Alto, including potential reforms to Brazil's uranium-pricing mechanism.
• Meteoric's expected installation license, 4Q26 FID, financing structure and the final pricing terms of its offtake agreements.
• Viridis's expected 4Q26 construction-license approval, completion of debt financing and progress toward 2028 operations.
• Implementation of Brazil's PNMCE incentives and CIMCE review process for critical-mineral transactions and offtakes.
• Whether the temporary suspension of China's October 2025 export-control measures is extended beyond November 10, 2026.