Minaçu, a Brazilian city once known for housing the Americas' only asbestos mine, is now pivoting to become a significant producer of rare earth minerals. This transition is being spearheaded by Serra Verde, a mining company controlled by the American investment fund Denham Capital. The goal is to be the first operation outside Asia to commercially produce a concentrate containing four key rare earths—neodymium, praseodymium, dysprosium, and terbium—essential for super magnets used in electric motors and wind turbines.
The shift comes after Brazil banned asbestos production and trade in 2017 due to health concerns, leaving Minaçu, a town of 27,000, in economic limbo. While asbestos mining never translated into broad economic prosperity for the town, with 32% of families living in poverty, local officials like Mayor Carlos Alberto Leréia have high hopes for rare earth mining royalties to boost local revenue. The Brazilian government is also stimulating the sector with a call for tenders, forecasting an investment of $1 billion in strategic mineral projects.
Serra Verde began extracting rare earths in January 2024, with initial shipments to China totaling 60 tons in September and 419 tons in February, aiming for a yearly goal of 5,000 tons. The operation's start was delayed from 2022. While the construction phase created about 1,600 jobs, the operational mine is expected to employ around 700 people from nearby towns, including Minaçu. Despite the optimism from some officials, researchers and residents express skepticism, noting that past mining operations did not lead to widespread social development or reduce poverty.
Brazil holds the world's second-largest rare earth reserves after China, and demand for these minerals, crucial for digital and defense technologies and the clean energy transition, is projected to at least triple by 2040. China's recent export restrictions have further highlighted the strategic importance of diversifying global supply. However, experts suggest Brazil needs a comprehensive industrial strategy, including investments in refineries, specialized labor, and domestic demand for super magnets and electric vehicles, to become a major player beyond just extraction.
