Brazilian and global rare earth elements supply chain: Brazil’s rare-earth pipeline is advancing as policy support and Western diversification raise the strategic value of non-Chinese supply chains.

Overview

This conference-takeaways report examines Brazil’s emerging rare-earth industry, project-level progress and the global value chain. Goldman Sachs frames Brazil’s opportunity around high-value magnet rare earths, domestic-processing policy and Western efforts to diversify supply away from China.

Core views

Goldman Sachs’ central conclusion is that Brazil is becoming an important potential pillar of the Western Hemisphere rare-earth supply chain. The report cites the country’s world-second-largest rare-earth reserves, high-value ionic-clay deposits containing heavy magnet rare earths, and Law No. 15,506/2026, enacted on September 16, 2026. The policy seeks to move Brazil away from raw-ore exports toward domestic beneficiation, with a BRL2 billion Mineral Activity Guarantee Fund and tax credits through 2034. At the same time, a new interministerial council, CIMCE, will review control changes, certain international offtake agreements and transactions involving critical-mineral rights. The report therefore presents policy support and state oversight as parallel forces shaping project development. The project discussions show different development paths. 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 of upfront capex and downstream start-up expected by 2031. The study envisages 5.3ktpa of NdPr production at an 11.3% TREO grade, around three times that cited for Lynas and MP Materials, and a US$21/kg NdPr-equivalent cash cost versus a US$110/kg NdPr spot reference. The company expects concentrate sales two to three years before downstream start-up. Goldman Sachs highlights a simplified mine-site flowsheet, ore sorting without water use, processing planned at Camaçari, and potential uranium by-product value, while noting that uranium also complicates permitting and is currently subject to a Brazilian government-only sales regime. Meteoric Resources’ Caldeira ionic-clay project has completed its DFS and targets start-up in 2H28. The project has 1.6Bt of resources, 230Mt of reserves and a 25-year mine life. It expects 3.7ktpa of NdPr and 122tpa of DyTb, with US$27/kg NdPr cash cost including by-products. Management stated that 90% of production is covered by three offtake agreements, although pricing details are still being finalized. The company targets a 60/40 or 70/30 debt-to-equity capital structure, with financing expected around October or November 2026. Its planned Brazilian separation step would follow MREC production by about two years, aiming to capture higher margins and align with critical-minerals incentives. Viridis Mining’s Colossus ionic-clay project has completed its DFS and targets 2028 start-up. It has 200Mt of reserves, 473Mt of resources and a 25-year mine life, with expected production of 2.8ktpa of NdPr at US$15.3/kg cash cost. The report cites 80% pilot-plant recoveries, a December 2025 environmental licence, an expected construction-licence approval in 4Q26 and an operating licence targeted for 2H28. Equity funding of US$154 million has been completed versus US$135 million required, while US$315 million of debt support is expected to be concluded in the short term. Its partnership with Solvay is intended to support Brazilian separation technology and offtake development. The report notes that early production matters because available offtake opportunities are limited. The report explains why project economics cannot be evaluated through mine grade alone. Nd, Pr, Dy and Tb are the four commercially decisive elements because they feed NdFeB permanent magnets used in electric vehicles, wind turbines, robotics and defence systems. In a typical development-stage project, they can account for 80% to 95% of revenue despite representing only 20% to 25% of contained tonnes. Hard-rock deposits generally offer higher grades of 1% to 10% TREO but require crushing, flotation, high-temperature cracking and management of potentially radioactive residues. Ionic clays generally have lower grades of 0.03% to 0.4% TREO but can be leached with ammonium sulfate at room temperature and tend to be richer in Dy, Tb and Y. In Brazil, however, the report notes that environmental restrictions may prevent in-situ leaching, making filtration, stripping ratios, water treatment and social licensing material execution issues for ionic-clay projects. The midstream separation stage is identified as the decisive bottleneck. Because adjacent rare-earth elements have near-identical chemistry, commercial separation requires long chains of binary splits and hundreds to thousands of continuously operating mixer-settler stages. Heavy-rare-earth separation is more difficult because feed concentrations are lower and purity requirements tighter. China’s approximately 90% share of global separation and refining capacity, alongside its more than 94% share of NdFeB magnet manufacturing, gives it disproportionate leverage even though it accounted for about 60% of mined supply in 2025. The report argues that a Brazilian mining industry alone would not solve supply-chain concentration; local separation, metallization and eventually magnet production are strategically more important but technically harder. Rare-earth pricing and policy are also central to the report’s reasoning. The market lacks an exchange, futures curve and cleared benchmark, so prices are assessed from thin bilateral transactions. China’s domestic oxide price has functioned as the de facto benchmark, but export restrictions have created a higher ex-China price tier. China’s April 2025 licensing regime remains in force, while proposed October 2025 measures were temporarily suspended under a diplomatic truce set to expire on November 10, 2026. The report cites the US Department of Defense’s MP Materials partnership as a template for state-backed market making: a 10-year US$110/kg NdPr floor, a US$400 million convertible preferred investment resulting in a 15% stake, and a 10-year 100% offtake commitment for MP’s planned 10X magnet facility. Goldman Sachs indicates that such policy support, combined with demand from magnet end markets and limited non-Chinese supply, can affect project valuation more materially than conventional geological or operating assumptions. The report’s supply-demand model shows total NdPrO demand rising from 90.0kt in 2025E to 144.6kt in 2035E. Magnet demand rises from 87.4kt to 142.2kt over the same period, with automotive EV demand increasing from 27.3kt to 61.3kt. The report characterizes rare-earth demand as relatively price-inelastic in the short run because the rare-earth content is a small share of end-product cost but difficult to replace functionally. Nonetheless, it stresses that building a fully integrated mine-to-magnet chain requires long lead times, and replacing China—especially in heavy-rare-earth processing—will remain difficult.

Analysis framework

The report combines management commentary from Brazilian Rare Earths Day with project studies, operating and financing milestones, a rare-earth value-chain primer, supply-demand modeling and policy analysis. It compares hard-rock and ionic-clay routes by grade, processing complexity, cost, radioactivity, product basket and permitting requirements, then links project prospects to China’s processing concentration and Western policy support.

Methodology notes

• Industry AnalysisUpstream-Midstream-Downstream Transmission

  Three-stage rare-earth value-chain analysis

  The report separates upstream mining, midstream separation and downstream magnet manufacturing to show that the greatest strategic bottleneck and value uplift sit in separation rather than extraction.

• Industry AnalysisSupply-demand framework

  NdPrO supply-demand model

  Goldman Sachs presents projected demand, production and refined supply through 2035 to connect magnet end-market growth with the need for additional rare-earth supply.

• Other

  Policy-adjusted DCF considerations

  The report states that export controls, price floors and regulatory assumptions now carry more weight in a DCF model than traditional geological or operational variables.

Asset mapping & comparison

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

• Brazilian Rare Earths (ASX: BRE)

  Example of a Brazilian hard-rock rare-earth development project targeting NdPr production and downstream processing.

  Strengths

  High reported grade, low projected cash cost, infrastructure proximity and potential uranium by-product credits.

  Weaknesses

  Early-stage project with downstream start-up expected by 2031.

  Comparison

  Hard-rock concentrate may enable earlier sales than ionic-clay projects, but requires further downstream processing.

  Risks

  Uranium-related permitting and sales restrictions, feasibility, construction and processing execution.

• Meteoric Resources (ASX: MEI)

  Example of an ionic-clay rare-earth project advancing toward financing and 2H28 start-up.

  Strengths

  DFS completed, 25-year mine life, 0.4% grade, pilot recoveries of 80% and offtake agreements covering 90% of output.

  Weaknesses

  Separation technology and pricing details for offtake are still being developed.

  Comparison

  Ionic-clay processing avoids hard-rock cracking steps but lower grades can increase filtration and material-handling challenges.

  Risks

  Financing completion, licensing, local separation execution and regulatory oversight of offtakes.

• Viridis Mining and Minerals (ASX: VMM)

  Example of a Brazilian ionic-clay project with advanced construction preparation and a Solvay separation partnership.

  Strengths

  DFS completed, US$15.3/kg projected cash cost, 80% pilot recovery and equity financing completed.

  Weaknesses

  Debt financing and construction licensing remain pending milestones.

  Comparison

  The project is positioned as an early potential producer with a strategic separation partner.

  Risks

  Debt funding, construction and operating licences, community engagement and technical execution.

• MP Materials (MP)

  Example of a US state-backed integrated rare-earth supply-chain strategy.

  Strengths

  US Department of Defense support includes a price floor, equity investment and guaranteed offtake.

  Comparison

  The report presents the MP arrangement as a potential template for critical-mineral financing outside China.

Key data

• Brazilian Rare Earths Monte Alto NPVUS$6BScoping-study estimate.
• Monte Alto NdPr production5.3ktpaExpected output; downstream start-up targeted by 2031.
• Meteoric Caldeira NdPr cash costUS$27/kgIncluding by-products.
• Viridis Colossus NdPr cash costUS$15.3/kgExpected project cash cost.
• China share of global REE refining capacityc.90%The report identifies processing concentration as the strategic bottleneck.
• China share of global REE mine productionc.60%As of 2025.
• MP Materials NdPr price floorUS$110/kg10-year floor guaranteed by the US Department of Defense.
• Total NdPrO demand90.0kt in 2025E to 144.6kt in 2035EGoldman Sachs supply-demand model.

Impact & implications

The report argues that Brazil’s strategic relevance depends on converting reserve potential into licensed, financed and technically capable domestic processing. Policy support and non-Chinese supply-chain demand may support project development, but separation capability, execution, funding, permitting and offtake terms remain decisive.

Risks

• Permitting may be more complex for projects with uranium or thorium content, including requirements for monitoring and radioactive-residue management.
• Brazilian ionic-clay projects may face filtration, stripping-ratio, water-treatment and environmental constraints if in-situ leaching is not permitted.
• Achieving commercial heavy-rare-earth separation at very high purity requires substantial technical capability and technology transfer.
• Project timelines depend on financing, construction, social licensing, regulatory approvals and offtake arrangements.
• China’s dominant processing position and export-control regime can continue to constrain availability and create pricing volatility.

What to watch

• Brazilian Rare Earths’ late-2026 mineral-resource update, feasibility work, permitting progress through 2029 and timing of concentrate sales.
• Meteoric’s expected installation licence, 4Q26 FID, financing structure and progression toward 2H28 production.
• Viridis’ expected 4Q26 construction licence, conclusion of debt financing and target operating licence in 2H28.
• Implementation of Brazil’s PNMCE incentives and CIMCE review requirements for critical-mineral transactions and offtake agreements.
• Whether China’s suspended October 2025 export-control measures are extended beyond the November 10, 2026 diplomatic-truce deadline.
• Progress in non-Chinese separation, metallization and magnet-manufacturing capacity.