Brazil’s rare earths industry working hard to overtake China’s dominance, ASX explorers poised to benefit
Mining heavyweight Brazil is working hard to overtake China as the world’s dominant source of rare earth elements (REE) production and processing.
The Latin American nation’s rare earths mining industry has just started to gain momentum despite having been a major mining destination for decades.
Established mining industry regulations and lower labour costs compared to Australia or the US could give it a competitive advantage in the race to quash China’s oversized presence in the sector.
The Brazilian government is looking to support the industry in the hope of tapping its vast REE resources and becoming a top global producer.
Local developers are also looking for a spot in the race to challenge China.
Serra Verde project
Earlier this year, the Serra Verde project became Brazil’s first integrated ionic absorption clay (IAC) rare earths mine and processing operation to commence production.
Controlled by energy transition-focused private equity firm Denham Capital, the project is located in the mid-western state of Goiás and has real potential to kickstart the development of a rare earth industry in Brazil.
Phase 1 of the project is expected to output around 5,000 tonnes of rare earth oxides contained in concentrate per annum.
Importantly, this will include the light rare earths neodymium and praseodymium and heavy rare earths dysprosium and terbium, essential to the manufacture of high-performance neodymium iron boron magnets used in electric vehicle (EV) engines and wind turbine generators.
Neodymium and praseodymium are used in the largest amount, but trace quantities of dysprosium and terbium are also critical for maintaining magnet performance at high temperatures within the engine.
Vast REE reserves
According to latest figures from the US Geological Survey (USGS), Brazil has the world’s third-largest reserves of rare earths at 21 million tonnes.
China sits in first place with 44Mt followed by Vietnam with 22Mt, with Brazil and Russia sharing third spot.
China is currently the only country with a fully vertically-integrated supply chain for rare earths magnets and is also the largest consumer of rare earth raw materials.
Japan is the only other nation with a large and highly-developed magnet industry.
Chinese dominance
The USGS report showed China produced 240,000 metric tonnes of rare earths last year, more than five times that of the US (the next biggest producer).
It processed around 90% of the world’s rare earths supply into permanent magnets used in everything from wind turbines and EVs to missiles.
The introduction of Chinese export controls on semiconductor metals gallium and germanium in August raised concerns about security of supply, partly because gallium is an important additive in the high-performance magnets.
Global market contribution
Despite Brazil’s position on the REE leaderboard, the country produces only a fraction of what it could contribute to the global market.
The USGS estimates the nation produced just 80t of rare earth raw materials last year out of total global supply of 300,000t.
Low rare earths prices, technical challenges and nervous lenders are believed to pose challenges to Brazil’s hopes of propelling itself into the world’s top five REE producers.
For countries such as Australia, Vietnam and Brazil looking to catch up to China, progress is slow.
Serra Verde for example, took 15 years to bring into production and is expected to double its 5,000t annual production by 2030.
By that time, the country could have two or three more producing rare earths mines, potentially exceeding Australia’s current annual output.
ASX rare earth explorers in Brazil
There has been a groundswell in recent times of Australian mining companies entering the Brazilian REE space.
Aguia Resources (ASX: AGR)
In May, Aguia announced it was conducting due diligence on an existing processing plant as a lower-cost alternative for the earlier start-up of its phosphate operations located in the State of Rio Grande do Sul.
The company said the plant could be purchased and repurposed to process phosphate ore at a significantly lower capital cost than the $26.2 million estimate in an earlier bankable feasibility study.
The plant is within trucking distance of the Tres Estrades deposit and nearer to the Mato Grande project.
Australian Mines (ASX: AUZ)
Earlier this month, Australian Mines reported anomalous REE values in stream sediment samples collected from its Resende lithium project licences in Minas Gerais.
The best assays returned total rare earth oxides (TREO) grades of 2,893 parts per million and 1,999ppm and early analysis indicated a potential REE assemblage which could contain significant concentrations of magnetic rare earth oxides (MREO) and favourable heavy rare earth elements (HREE).
The company will complete follow-up mapping and sampling with the aim of confirming the source of the TREO anomalism, its size and economic potential in parallel with advancing exploration over contiguous anomalous tin, tantalum and lithium drainage basins nearby.
Brazilian Rare Earths (ASX: BRE)
Drilling at the newly-discovered Pelé project this month identified high-grade rare earths-niobium-scandium-uranium mineralisation across large, weathered outcrops 60 kilometres south-west of its Monte Alto project.
The exploration program returned high-grade REE assays from extensive hard rock outcrop mineralisation at Pelé Target 1 as well as large-scale geophysical anomalies and high-grade monazite sand mineralisation from shallow auger drill holes.
A total of 61 grab samples returned grades of up to 10.4% TREO, 12,798ppm neodymium-praseodymium, 430ppm dysprosium-terbium, 5,010ppm niobium oxide, 506ppm scandium oxide and 1,035ppm uranium oxide.
The company is now planning a 5,000m maiden diamond drilling campaign at Pelé Target 1 to target the mineralisation at depth.
Brazilian Critical Minerals (ASX: BCM)
Metallurgical results from the May testing of a 49.6-kilogram bulk sample from the Ema rare earth project revealed “outstanding” MREO recoveries averaging 69% neodymium-praseodymium and 48% dysprosium-terbium.
The results are believed to be some of the highest-ever recorded recoveries from an ionic clay rare earth deposit in Brazil and potentially worldwide.
Additionally, an inferred mineral resource estimate of 1.02Bt grading 793ppm TREO (including a higher-grade portion of 331Mt at 977ppm TREO) places Ema amongst the largest tonnage fully IAC REE deposits in the world.
“Ema is a significant rare earth deposit that can be placed on the path towards development and allows [us] to now move ahead full steam with the next phase of our project implementation,” the company said.
Progress at Ema will be funded by a recent $2m capital raising that issued 87 million shares at $0.023 each to existing institutional investors.
Enova Mining (ASX: ENV)
A maiden reverse circulation campaign commenced this month at the Coda project situated in the REE-enriched Patos geological formation in Minas Gerais.
Recent drilling results confirmed the potential for REE-enriched IAC in the northern and southern Coda tenements.
At Coda North, peak TREO assays of 10,666ppm, 7,943ppm, 7,218ppm, 6,985ppm and 6,459ppm provided guidance for a high-grade exploration target, while the highest intercepts at Coda South were 0.5m at 5,697ppm TREO and 1m at 5,078ppm TREO.
Australian-based Enova has established a Brazilian exploration team to manage and support in-country operations, with a warehouse facility and office leased in Patos de Minas for sample preparation and storage.
Equinox Resources (ASX: EQN)
An expanded field work program at the Campo Grande REE project has discovered new outcropping boulders with the potential to host high-grade hard rock rare earth mineralisation.
The outcrops were inspected and hard rock grab samples were collected to send to the laboratory for comprehensive assaying.
The field work follows a recent drilling program at the Rio Negro hard rock REE prospect that makes up a small portion of Equinox’ 1,800 sq km landholding.
The company confirmed that new areas containing high thorium anomalies had been identified over much of the prospect.
Thorium is a key pathfinder element for high-grade rare earth mineralisation.
Gold Mountain (ASX: GMN)
Gold Mountain confirmed in early June that preliminary traversing over regional radiometric targets at the Ronaldinho project in the Maracas region of Brazil’s Bahia state had identified new thorium anomalies with grades of over 4% TREO.
Extensive areas of potentially-mineralised rock were inferred, as were observations of the thick weathering profile.
Follow-up work in July will include extensive additional traverses in the anomalous region and stream sediment and channel sampling to confirm REE contents of the thorium anomalous area.
Meteoric Resources (ASX: MEI)
An updated resource estimate at Meteoric’s Capão do Mel licence in Minas Gerais has doubled the measured and indicated resource of the company’s Caldeira project.
The 147% increase puts the new resource at 85Mt grading 3,034ppm TREO at a 1,000ppm cut-off and includes a high-grade core of 36Mt at 4,345ppm TREO (3,000ppm cut-off) for 19Mt at 5,163ppm TREO (4,000ppm cut-off).
It increases Caldeira’s global resource to 619Mt at 2,538ppm TREO (1,000ppm cut-off) with 23.6% MREO.
The results highlight Caldeira as one of the highest-grade IAC REE deposits in the world and position Meteoric as a near-term, low-cost supplier of critical minerals.
Perpetual Resources (ASX: PEC)
A maiden drilling campaign has commenced at Perpetual’s recently-acquired Raptor REE project, located within the prolific Caldeira complex in Minas Gerais.
The company will utilise a motorised manually-operated auger rig to a total depth of 20m to obtain data from the deeper saprolite profile where grades are typically significantly higher than surface results.
Raptor covers an area of 3.8 sq km and is located near to Meteoric’s Caldeira IAC REE project.
Perpetual said mineralisation in nearby projects has been found in drill depths reaching 8m, indicating shallow subsurface systems.
Patagonia Lithium (ASX: PL3)
Patagonia has completed initial ground truth mapping and sampling at 18 granted concessions within Minas Gerais state to test for REE and lithium.
A total of 80 prospective rock and channel soil samples were collected and sent to the laboratory in two batches for testing.
The campaign is being fast-tracked so the company can sure up drill targets ahead of an aggressive and high-intensity Phase 2 exploration program which will include maiden auger drilling.
Patagonia was granted the concessions in May for a period of three years.
They sit across 195 sq km of land prospective for lithium pegmatites, REE and IAC.
Si6 Metals (ASX: SI6)
Last month, Si6 reported the discovery of an extensive pegmatite zone at the Padre Paraiso project within Brazil’s famed “Lithium Valley” in northeast Minas Gerais.
Recent exploration results also identified the potential for clay-hosted REE mineralisation in the southern portion of the tenement.
One of the holes from systematic auger drilling returned 9m grading 1,342ppm TREO including 1m at 1,915ppm.
The proportions of neodymium and praseodymium were reported to be “encouraging” and graded up to 405ppm.
In May, Si6 secured 16 tenements over 300 sq km of northeast Minas Gerais in a joint venture with private company Foxfire Metals.
Known as the Pimenta project, it contains significant thorium anomalies indicating high prospectivity for IAC and allanite-hosted REE.
Summit Minerals (ASX: SUM)
First assays from Summit’s surface pegmatite rock chip sampling at the Equador niobium-REE project have confirmed high-grade niobium and tantalum over a 1.2km strike length in the Borborema pegmatitic province.
Summit acquired the Equador project in April as part of a suite of niobium, REE and lithium assets.
The company said its critical mineral strategy was founded on the acquisition of several REE and niobium-rich opportunities in a country that hosts approximately 98% of the world’s active niobium reserves.
Borborema is reported to be one of the world’s most important sources of tantalum, REEs and beryllium.
Viridis Mining and Minerals (ASX: VMM)
Step-out auger drilling at the Cupim South deposit within the Colossus IAC REE project area has established multiple zones grading more than 7,000ppm TREO that remain open in all directions.
The results are located outside the boundary of the maiden Cupim South mineral resource and have confirmed widespread mineralisation across the mining licence.
The new discoveries demonstrate that the current deposit represents a fraction of the total mineralised system.
A maiden resource estimate announced earlier this month for Colossus sits at 201Mt grading 2,590ppm TREO at a 1,000ppm cut-off.
The estimate covers only a small portion of total project acreage and is believed to position the company as a premier developer of IAC REEs in the region.