In an industrial district in Poços de Caldas, a city in southern Minas Gerais, a pilot plant covering 5,000 square meters processes ionic clay and turns it into mixed rare earth carbonate, the intermediate product that comes before the separation of minerals used in high performance magnets. It was for this facility, the Rare Earths Research and Processing Center (CPTR) run by the mining company Viridis, that Brazil's state development bank, the BNDES, approved R$ 77.5 million in financing this week. The decision came six days after the Senate approved, on September 2, a National Policy for Critical and Strategic Minerals, and it helps explain why Brazil now sits at the center of the global race for these resources.
According to g1, the money comes from the BNDES Mais Inovação program, with a 16-year term and an indicative cost of about 4.8 percent, and was released after Viridis won a public call issued in 2025 by the BNDES and the innovation agency Finep for projects in the strategic minerals chain. The funds will support the center, which opened in May, where the company says it has invested R$ 25 million and which it describes as one of the largest pilot plants of its kind in the world. The unit processes 100 kg of ore per hour and can produce up to 2,920 kg of mixed carbonate a year, and it will be used to test and refine the technologies behind the Colossus project, a 373-hectare mine now in licensing, with extraction due to start in 2028. For Viridis chief executive Rafael Moreno, the loan, added to US$ 154 million in equity already raised, strengthens the company's finances as it seeks the senior debt needed to build Colossus.
"This is an investment aimed at fostering national rare earth production, which helps position Brazil as a strategic global supplier of critical minerals for the energy transition," said BNDES president Aloizio Mercadante, who also cited support for the local innovation ecosystem and the creation of skilled jobs.
What the Senate approved
The policy is contained in bill 2.780/2024, authored by lower house lawmaker Zé Silva, and it passed the Senate without changes to its substance, going straight to President Luiz Inácio Lula da Silva for signature. According to the Senate's news agency, the text provides up to R$ 7 billion in incentives for processing and transformation projects, including R$ 2 billion from the federal government to create a Mineral Activity Guarantee Fund (FGAM) and another R$ 5 billion to process the minerals inside Brazil. For six years, companies involved in exploration, mining, processing and transformation must direct 0.2 percent of gross operating revenue to the guarantee fund and 0.3 percent to research, development and innovation. "Critical minerals become the backbone of other production chains, and any rupture or shortage can cause significant unwanted effects on other relevant national sectors," said the bill's rapporteur, Senator Eduardo Braga.
Washington, Beijing and the mineral race
Rare earths go into electric cars, wind turbines, advanced chips and military equipment, and the market is concentrated in China, which handles about 90 percent of global processing and holds the largest known reserves, according to g1. Brazil has the second-largest known reserves of critical minerals and still mines little of that potential, which has made it a target of United States interest.
In April, USA Rare Earth, a company in which the U.S. government holds a stake, announced the purchase of Serra Verde, until then the only critical minerals producer operating in the country and the only company outside Asia to supply the four main minerals for high performance magnets: neodymium, praseodymium, dysprosium and terbium. The deal was worth US$ 2.8 billion and, three months later, the U.S. Commerce Department announced plans to invest US$ 1.6 billion in the buyer in exchange for 16 million shares. Before the sale, Serra Verde operated under a ten-year contract with China's Shenghe Resources, ended in 2025 seven years ahead of schedule, and at one point shipped 85 percent of a year's production to the Chinese chain. In August, the U.S. Department of War announced a US$ 750 million package to buy minerals from Serra Verde's Pela Ema project, part of a US$ 1.55 billion plan, with a commitment to purchase at least US$ 300 million in rare earth products over five years.
The Brazilian government has voiced concern about the agreement and is studying a court challenge, because it allows the resources to be exported without requiring that part of the processing take place in Brazil, g1 reports, which also reported that trade talks between the two countries over tariffs resumed days later.
In Poços de Caldas, meanwhile, mixed carbonate keeps leaving the pilot plant in small batches. The future 373-hectare mine sits about 300 meters from houses and divides residents, and the city government asked the state not to authorize mining so close to the population, according to g1 reports. The question being decided in Brasília and in Washington, whether to ship raw ore or build at home the industry that transforms it, begins to be answered in the ionic clay processed in the industrial district of this mining town.