General discussion (MEI), page-6322

Australian rare earthsminers join rush to Brazil

At least 13 small Australian miners are frantically trying their luck –and trying to raise money – to develop rare earths mines. But why are theychoosing Brazilian projects rather than Australian?

Jennifer HewettColumnist

Jun 10, 2025 – 10.31am

The global race for rare earths is on. The world has belatedly realisedthe risk of allowing China to control the market for the rare earth’s metalsand magnets so vital for modern living, so it may not seem unusual for twosmall ASX-listed miners to be attempting projects in adjacent tenements in apro-mining state.

What is surprising is that their efforts are in Brazil, rather thanAustralia.

Few imagined the risks of China now dominating more than 70 per cent ofglobal supplies and over 90 per cent of processed metals and magnets. AP

Meteoric Resources andViridis Mining and Minerals are just two of atleast 13 small Australian miners trying their luck in Brazilian rare earths.Even Gina Rinehart has joined the 2020s version of a gold rush, with HancockProspecting taking a stake in Brazilian Rare Earths, which is in explorationphase.

That’s because rare earths elements are crucial for the lightweight,long-lasting, heat-resistant magnets used by most modern technologies,including electric vehicles, the energy transition and defence equipment.

China’s latest export restrictions have alarmed industries andgovernments everywhere. It’s painful evidence of how vulnerable the world is to Beijing’s willingness to use rare earths as a political weapon.

Whether Donald Trump’s phone call with Xi Jinping will make muchdifference is not clear. US officials were heavily focused on rare earths inthe new round of US-China trade talks in London onMonday (Tuesday AEST). But even a deal can’t end the threat of constant disruption. This only adds urgency to the search for non-Chinese alternatives.

Klaus Petersen, Brazilian country manager for Viridis, says acombination of global forces is suddenly combining to create an extraordinaryopportunity – but one where standards and rules are still being developed.

“All these big themes are coming together,” he says. “The move toelectrification, the need to act on climate change, the clean energyrevolution, deglobalisation, with nations wanting to secure their own supplies,the remilitarisation of many countries.

Klaus Petersen, Brazil country manager for ASX-listed minnow ViridisMining and Metals.

“It’s an amazing moment and it’s what makes these sorts of projectsdesirable for many countries. The question is whether China will keep controlof this industry permanently, or whether the Western world can do something.”

The catch is that while the rare earth elements are not that rare,mining and processing them at commercial scale is tough. It’s tougher stillwhen China uses its dominance to control the global price as well as thesupply. Even small mines cost hundreds of millions of dollars to develop, withprocessing facilities adding far more.

Today’s plunging price for rare earths is why so few Australian projectshave progressed beyond political rhetoric and vague expressions of futurepotential. That’s despite initial optimism aboutAustralia’s new critical minerals boom, including rare earths, backed by government urging, financial assistance and the lure of US and European demand.

Instead, some small miners are turning to Brazil on the basis thatcheaper development along with quicker approval processes should make theirprospects more viable.

Apart from leveraging the far lower cost of doing business there, many(though not Hancock’s prospective mine) are banking on Brazil’s differentgeology in obtaining rare earths from ionic clay, rather than the hard rockmore typical in Australia. Brazil is one of few countries with such deposits,alongside southern China, Myanmar and Vietnam.

Ionic clay adherents argue that it is less complicated, less expensiveand more environmentally friendly to extract the rare earths.

For example, rather than blasting and then using highly acidictreatments and ultra heat of around 700 degrees to process the raw materialinto carbonate, ionic clay relies on a milder ammonia sulphate wash to liberatethe rare earths and produce mixed rare earth carbonate. This still requiresmoving a massive amount of clay – and finding the money – for a tiny percentageof rare earths.

Despite China’s long experience, the rare earths industry elsewhere isso new that such projects also require constant experimentation, risk and hope.A US private equity-owned company, Serra Verde, became the first to start rareearths production in Brazil last year, but is already facing technicalproblems.

Lack of understanding

Not that rare earths are entirely unfamiliar in the West. The French,for example, had a rare earths processing plant decades ago, while MountainPass in California used to mine hard rock rare earths. Both have recentlyrestarted operations. Canadian-based NEO Performance has a processing plant inEstonia.

But the industry in Western countries basically shut down for decadesbecause it couldn’t compete with China’s much lower costs. Maintainingalternatives didn’t seem so important, given the lack of understanding aboutthe future significance of rare earths for modern living. Few imagined therisks of China now dominating more than 70 per cent of global supplies and over90 per cent of processed metals and magnets.

Japan had early experience of the threat when China restricted suppliesas part of a territorial dispute more than a decade ago. It helps explain whythe Japanese invested in Australia’s Lynas Corporation – then strugglingagainst Chinese attempts to force it out of business. Western countries stillpreferred to concentrate on China’s cheaper costs and technological expertise.

Now Australian miners want to be part of a Western effort to change allthis despite unpredictable results.

Viridis’ Petersen is Brazilian, for example, but had lived in Perth forseveral years when Australian companies started inquiring about prospects inBrazil. He eventually joined Meteoric Resources, which had bought a potentialgold project in Brazil. Meteoric sold it in favour of leveraging globalenthusiasm for rare earths after acquiring a clay tenement with promising rareearth grades. This is in the traditional mining state of Minas Gerais(translated as General Mines), which is even more predisposed to miningdevelopment than Western Australia.

Meteoric is going through the approvals process before construction,which is planned for next year ahead of first production in the first half of2028. That’s much faster than an Australian mine. After deciding to retire,Petersen was lured back by the idea of developing viridian in similar ionicclay tenements next door. That leaves its timing a little behind Meteoric.

There’s still the big money question. Both projects will need about$US400 million ($613 million) to develop. Both are talking to Westerndevelopment banks. No deals yet. Could the Chinese be interested if not?

Australia’s rare earths rush is just getting started – in Brazil.

Jennifer Hewett is in Brazil on a visit supported by the Council onAustralia Latin America Relations funded by the Australian government.

Really - DYOR