Dr. Sodfa Mohamed Mahmoud‏‏

On August 6, 2025, Brazilian President Lula da Silva announced to Reuters his plans to formulate a new national policy that labels the country’s strategic minerals as matters of ‘national sovereignty’. The policy aims to prevent the export of raw minerals without adding domestic value. The decision came in response to remarks by Gabriel Escobar, the Chargé d'Affaires of the U.S. Embassy in Brazil, who conveyed Washington’s interest in Brazilian strategic minerals during a meeting with the Brazilian Mining Institute (IBRAM), a private entity representing companies in the sector. With the Trump administration’s 50% tariffs on Brazilian exports, tensions between Brazil and the United States have intensified, placing critical minerals at the center of their discussions.Heightening ImportanceRare earth minerals have become the focus of trade talks between the United States and Brazil, due to the following factors:1- Brazil’s vast reserves of critical minerals: Government data shows that Brazil holds approximately 94% of the world's niobium reserves. The mineral is essential for steelmaking, construction, turbines, high-speed trains, batteries, as well as space and military equipment, such as hypersonic missiles. It also holds significant reserves of nickel, graphite, and manganese. Government and industry reports indicate that Brazil could supply approximately 15% of the world's lithium by 2030. The country’s reserves of this mineral are concentrated in the northeastern region of the states of Minas Gerais and Bahia. Moreover, Brazil holds about 23% of global rare earth reserves, ranking third in the world after China and Vietnam. However, it represents less than 1% of global production, because many untapped reserves are located in regions such as the Amazon rainforest, creating a challenge for Brazil to balance forest protection with the exploitation of its abundant mineral resources.2- The U.S. high tariffs on Brazil: The United States imposed a 50% tariff on Brazilian exports, citing the need to protect American jobs and enhancing national security by encouraging domestic mineral processing and manufacturing. In this context, U.S. officials have hinted at getting preferential access to Brazilian mineral resources in exchange for a favorable trade deal, indicating Washington's desire to use Brazil's vital minerals as a bargaining chip in trade negotiations. Despite its abundant reserves, only about 3% of Brazil’s mineral exports go to the United States. This explains Washington's desire to increase Brazil's mineral supplies and its pressure for greater participation by American companies in the Brazilian mining sector.3- Intensified global competition over rare earth minerals: In recent years, competition has intensified among major powers over strategic mineral supplies, especially lithium. Access to lithium has become synonymous with power and a factor in ensuring technological superiority. It is an indispensable resource for future industries, from electric vehicles and solar panels to military equipment and advanced smartphones. This is in addition to its growing importance in the global energy transition. The presence of approximately 52% of the world's lithium reserves in the so-called Lithium Triangle, which includes Bolivia, Argentina, and Chile, has attracted the interest of major economic players worldwide and spurred a race to obtain this mineral. Between 2019 and 2022, Chinese companies invested approximately $4.5 billion in lithium projects in Mexico and South America. Increasing quantities of Latin American minerals, including those extracted and processed by Chinese companies, are flowing to China as a result of these projects. According to the Boston University’s Global Development Policy Center, China's share of extractive exports from Latin America grew from 1% in 2000 to 34% in 2020.4- U.S. Efforts to Diversify Global Supply Chains: President Trump seeks to secure U.S. supplies of critical minerals. He criticizes China's dominance of the sector, noting its control of about 60% of global rare earth minerals production and approximately 90% of their refining or processing. On the other hand, the United States sources 80% of its rare earth imports from China. After Beijing imposed strict export controls on certain minerals earlier this year, the Trump administration began making deals with several countries, including Ukraine, to secure critical minerals.In July 2025, Trump hosted the leaders of five African countries at the White House for a strategic summit, one of the main objectives of which was to negotiate U.S. access to critical minerals. In the same month, Trump announced a 50% tariff on copper imports from Chile, Canada, and Mexico, effective in August 2025, in an effort to protect domestic industry and pressure foreign suppliers. Recent exploration results in Brazil indicate significant lithium reserves, positioning it to become a major supplier of the metal in the coming years and potentially a realistic alternative to Chinese dominance in some critical metal markets, further diversifying supply chains.Brazilian ResponsesIn response to repeated demands by the U.S. to access Brazil's rare earth minerals, President Lula has pursued a mix of rhetoric positioning and concrete measures, including:1- Pledge to Protect National Sovereignty over Critical Minerals: President Lula criticized statements by a U.S. embassy official suggesting that Brazilian rare earth minerals were included in bilateral discussions with Brazilian companies in the sector. He emphasized that these resources belong to the Brazilian people and should directly benefit them. Lula emphasized that Brazil cannot allow the exploration of rare earths and other mineral resources to follow the model adopted by Ukraine in its agreement with the United States. According to this agreement, the U.S. would give Ukraine defense supplies in return for getting access to Kyiv’s wealthy mineral resources. In response, Lula pledged to treat strategic minerals as a matter of "national sovereignty," emphasizing the need to discuss this issue through negotiations, not economic threats or tariffs.2- Forming a Commission to Map Undiscovered Resources: The Brazilian president revealed that his country currently lacks a complete map of its mineral wealth, announcing the formation of a commission to map unexplored mineral reserves. He ordered the establishment of the ‘National Council for Mineral Materials and Standards’ to protect the local mineral sector as well as ensure that the minerals are not exported elsewhere for refining and processing. This will enable the country to lead the global energy transition. Lula also highlighted that the council will work to facilitate operational hurdles for companies in the sector.3- Strengthening the State's Role in Mining Activities: Lula's government is working to increase state involvement in the exploration and processing of critical minerals. The creation of a state-owned company dedicated to the processing of rare earths is a prime example of the growing trend toward what is known as ‘resource nationalism’. This reflects a shift in Brazil's approach to resource management, positioning mineral assets as tools for securing economic independence and achieving sustainable growth, rather than simply raw materials for export. "We won't allow what happened in the last century to happen again, where Brazil exports raw minerals and then buys products with very high added value," the president, known as Lula, said in the interview. "We want to add value in Brazil."4- Building National Manufacturing Capacities: A 2023 UNCTAD report warned that reliance on the export of raw materials, such as minerals, poses a significant challenge for developing countries and can create serious social and economic traps. The report argues that this dependence hinders economic development and perpetuates inequalities and vulnerabilities across sub-Saharan Africa, South America, the Pacific, and the Middle East. To reduce vulnerability to external price fluctuations and supply chain disruptions, Brazil has begun to place particular emphasis on investing in technology, research, and building local refining and processing capacities for strategic minerals, in its capacity as a major exporter of iron ore and lithium. With this move, it aims to generate jobs and create an added value.5- Developing Sustainable Mining Practices: The United Nations notes that conflict over mineral resources tends to grow—both within and across national borders. Some 40% of intra-national conflicts recorded in recent decades have been related to the exploitation of natural resources, including access to minerals. In a similar vein, the Brazilian government is working to establish environmentally responsible mining operations and promote the participation of indigenous communities, which are key principles of Brazil's Mineral Law. This is crucial to maintaining a positive international image, attracting responsible investments, and ensuring the participation of local communities, which have a long history of opposing unsustainable mining activities.6- Diversifying International Partnerships: Brazil is exploring new ways to counter US trade barriers and diversify export markets, particularly for strategic minerals, by concluding trade and investment agreements with countries outside the United States, including the European Union, Russia, and China. Earlier this year, Brazilian and Russian officials began talks on joint uranium and lithium extraction, and in February 2025, Chinese electric vehicle manufacturer BYD acquired mining rights to a lithium-rich area in Brazil.Amid the global shift to clean energy and the growing need for advanced technology, competition over Brazilian mineral supplies is set to intensify, further fuelling geopolitical tensions. To navigate this, Brazil needs to act strategically by developing a strong industrial policy and a long-term vision that adds value to its mineral resources. This will help it turn its wealthy resources into a tool of both economic growth and political leverage amid escalating global rivalries.

How Has Brazil Responded to the U.S. Interest in its Strategic Minerals?