What are rare earths and why are they so important?

The trade dispute between the United States and Brazil began to take on new dimensions on Thursday, the 24th, after it was revealed that U.S. diplomatic representatives had communicated that the White House is interested in critical and strategic minerals on Brazilian soil . Among these minerals are so-called rare earth elements (REEs).

The U.S. interest was expressed during a meeting between the U.S. embassy's chargé d'affaires and Brazilian mining sector representatives this week. The talks took place at a time of tension between the U.S. and Brazilian governments, amid President Donald Trump's threat to impose a 50% tariff on Brazilian products starting in August.

Participants at the meeting stated that they did not interpret the US official's remarks as an attempt to condition negotiations for tariff relief on access to minerals. However, President Luiz Inácio Lula da Silva quickly stated that he will not allow foreign interference in Brazil's handling of mineral exploration. "No one here gets involved," Lula said on Thursday .

Brazil has large reserves of copper, nickel, niobium and lithium, as well as the world's second largest reserve of rare earths .

In the first half of the year, the US had already pressured Ukraine to sign an agreement for the exploration of rare earths in the Eastern European country, amid threats from the White House to cut its military assistance to the Ukrainians.

What are rare earths?

Rare earths are a group of 17 chemical elements that play a small but irreplaceable role in many modern technological products: smartphones , flat-screen televisions, digital cameras and LEDs all depend on them.

However, their most important use is in the manufacture of high-powered permanent magnets that maintain their magnetic properties for decades. They allow the production of smaller and lighter parts than non-rare earth-based alternatives, making them essential in the construction of electric vehicles and wind turbines.

Rare earth elements (REEs) are also vital to a wide range of defense technologies, from fighter jets to submarines to laser rangefinders. This strategic importance, both for trade and defense, is what makes them so valuable. A kilogram of neodymium and praseodymium, the most important REEs for permanent magnets, currently costs around 55 euros (353 reais); that of terbium, up to 850 euros (5,460 reais). For comparison, the price of a kilogram of the not-so-rare iron ore currently costs around 60 cents.

Based on their atomic weight, these 17 minerals are categorized as light, medium, and heavy. In reality, they are not "rare," as they are present in trace amounts throughout the world. The challenge is identifying where their concentration is high enough to make extraction financially viable. According to the United States Geological Survey (USGS), currently 70% of the rare earths used come from mines in China.

The most important is Bayan Obo, in the north of the country: containing enormous quantities of all the elements used in permanent magnets, this source is several orders of magnitude larger than other rare earth deposits on the planet, such as Mount Weld, in Australia, or Kvanefjeld, in Greenland.

Chinese monopoly worries the West

Once mined, rare earth elements undergo a highly specialized separation and refining process until they are transformed into usable compounds. Because this processing largely occurs in China, the country is also the largest producer of magnets .

This monopoly is even stronger for certain types of REEs. Light REEs are less valuable and easier to extract, with the exception of neodymium and praseodymium: between 80% and 100% of the European Union's supplies of this group come from China; while for the heavier elements, the dependence is 100%.

This monopoly has left several Western states concerned about future access. In recent years, Americans and Europeans have responded by building up domestic reserves of rare earths and other critical materials.

In 2024, the EU signed the Critical Raw Materials Act, setting non-binding targets for the volume that the bloc itself should have produced by 2030. The legislation also provides for the designation of "strategic projects," both domestically and with close allies such as Norway, aimed at ensuring access to financing, increasing public acceptance, and streamlining approvals and licensing.

In turn, since 2020, the U.S. Department of Defense has been investing heavily in domestic companies and aims to create a "mine-to-magnet" supply chain by 2027. Gallium, germanium, and antimony are among the most important rare earths for the country.

The EU and the US also express interest in untapped sources of these strategic minerals. President Donald Trump has targeted Ukraine and Greenland , both of which have the potential for large deposits, but are difficult to access. Thus, the future supply of rare earth elements to Western countries remains uncertain.