South America's bauxite-giant Brazil now bets big on critical minerals with policy push and rising investments

Vast resources yet modest output

The problem with Brazil is it lhas huge reserves where output is not at par. For instance, in 2024, Brazil produced 0.01 per cent of the world's rare earths output despite owning 23.3 per cent of the world's reserves. The country churned out 4.3 per cent of the world's graphite and accounted for 3 per cent of the world's manganese production despite of having 25.5 per cent and 16 per cent of reserves for the respective minerals. Only the average share to the world's bauxite production is relatively higher around 7 to 8.2 per cent.

The country is striving to expand its mineral exploration by pushing new mining policies and increasing investments. In 2024, Brazil was the eighth largest recipient of exploration investment worldwide. Between 2019 and 2024, Brazil's investment in exploration in domestic mining sector surged by 51.5 per cent, reflecting a sharp upward trend in investor interest. This is despite less than 50 per cent of Brazil being geographically mapped.

Bauxite heartland

The Pará State, in the north of Brazil, holds the largest bauxite reserves in the country, historically accounting for over 90 per cent of the Brazilian's production. The state of Minas Gerais follows with 7 per cent of the production, while the states of São Paulo, Santa Catarina and Goiás collectively hold 3 per cent. Relevant bauxite occurrences are also found in the states of Bahia, Maranhão and Amapá. In Pará, key extraction and processing companies include Mineração Rio do Norte, Mineração Paragominas and Alcoa. In the centre of Brazil, Companhia Brasileira de Alumínio (CBA) and Terra Goyana are significant players.

The Paragominas mine in Pará, operated by Norsk Hydro, is one of the largest mines with estimated reserves of 1 billion tonnes, followed by Juruti mine located in Western Pará, operated by Alcoa.

A powerhouse of critical minerals

Besides being a giant in bauxite mining in South America, Brazil has all the elements to become a hub for critical minerals, with estimated rare earths reserves of about 21 million tonnes, graphite 74 million tonnes, niobium and nickel 16 million tonnes each, and manganese and lithium 270,000 tonnes and 390,000 tonnes, respectively. Brazil's lithium industry is also showing growth in exports from being zero to the fifth-largest export mineral in 2023, with projections of a fivefold production increase in the next five years. In the Southeastern state of Minas Gerais, "Lithium Valley" hosts 11 projects, with hundreds of kilometers across the state with lithium reserves - crucial for electric vehicle batteries and energy storage systems.

Global interest and policy push

Brian Menel, CEO of Techmet, the company that received US equity investment for a nickel and cobalt mine in Brazil, underpinned in an interview with the Center for Strategic & International Studies that Brazil is very well endowed with critical minerals and is potential to develop these resources beyond historical development. He also said Brazil has a lot of advantages in critical minerals mining beyond the endowment and resources as it is a very well mining jurisdiction in terms of functional regulatory, expertise in executing and implementing projects.

Another key advantage is Brazil's strategic geographical location, especially for the United States, which makes the country even more potential to be an important supplier of mineral to the US. Already in 2024, Brazil supplied USD 283.83 million worth of aluminum and mineral fuels, oils, and distillation products worth of USD 7.96 billion, showed Statista.

Going ahead, Brazil can emerge as a viable supplier of critical minerals to the US, expanding its mining activities with more than 9,000 active mining projects and private investments worth USD 64.5 billion between 2024 and 2028.

In terms of regulations, the government is bringing in lenient mining reforms, such as Bill No. 2,159/2021 approved by the Chamber of Deputies on July 17, 2025, which relaxes environmental licensing for medium-risk activities, including mining, potentially increasing legal uncertainty and socio-environmental conflicts. In April 2025, National Policy on Strategic Minerals launched, aimed at attracting investment and strengthening the supply chain of critical minerals for the energy transition.

New discoveries and projects

Axel REE Limited Minerals, an ASX-listed Australian explorer, has recently announced significant progress at its Caladão rare earth project in Brazil, confirming a maiden inferred mineral resource estimate (MRE) of 233 million tonnes (Mt) at 2143 parts per million (ppm) of total rare earth oxides (TREO). Weeks ago, they also confirmed world-class gallium resource of 100 million tonnes grading 42ppm in lateritic soils, or 4200 tonnes of contained gallium.

"Releasing a second Inferred Mineral Resource Estimate in the space of a few weeks, completed by SRK Brazil (SRK) is a significant milestone for the Caladão Project, which now hosts two distinct MREs – 100Mt Gallium MRE and 233Mt REE MRE," AXL Non-Executive Chairman Paul Dickson said.

"The delivery of a maiden 233Mt rare earth resource, so soon after the 100Mt gallium estimate, demonstrates both the scale and the strategic importance of Caladão," added Paul Dickson.