Nov 06, 2026 News
RIO DE JANEIRO, Nov 5 (Reuters) – The reelection of leftist Luiz Inacio Lula da Silva as Brazil’s president will likely dash US President Donald Trump’s hopes of securing fast access to the world’s second-largest rare earth reserves.
A victory last month for Lula’s challenger Flavio Bolsonaro — whose family is close to Trump — could have sped up US investment in Brazil’s mineral wealth, helping Washington in its race with China for the raw key to modern manufacturing.
Instead, Lula’s government plans new regulations for the sector to be set out by the new National Council for the Industrialization of Critical and Strategic Minerals (CIMCE), three council members told Reuters ahead of its first meeting on Thursday. Lula is set to attend.
查看配图：Lula's election win dashes US hopes of quick access to Brazil's rare earths
President Luiz Inacio Lula da Silva
US investment will still be welcome, but the council will prioritize processing rare earths within Brazil rather than exporting them as raw materials, they said.
New rules will govern investment incentives and classification of priority projects in rare earths, which are essential to the tech, auto and energy industries. Lula has previously warned of the risk of a colonial-style scramble by outsiders for Brazil’s natural resources with little gain for the country. “What’s most important is to produce more in Brazil. To process, manufacture, add value and invest in knowledge, research and development,” said Marco Lage, a CIMCE member. “That’s what China has been doing for 30 years.”
Trump has previously used tariffs and sanctions in an unsuccessful attempt to pressure Brazil to drop the prosecution against former President Jair Bolsonaro, who is serving a 27-year sentence for attempting a coup to stay in power after losing elections in 2022. When his son Flavio Bolsonaro left the country shortly after losing last month’s election, despite a Supreme Court order to surrender his passports, the US offered him safe harbor. He has said he left because he was the target of a “politically motivated witch hunt” and would be imprisoned if he stayed in Brazil.
Trump wanted preferential access to Brazil’s rare earths, a US State Department official with knowledge of discussions between the countries told Reuters earlier this year. After meeting Trump in May, Flavio Bolsonaro promised a “long-term strategic partnership” over the deposits.
The White House did not immediately respond to a request for comment.
Analysts expected Flavio Bolsonaro would scrap CIMCE if he became president, freeing firms from pressure to develop a downstream rare earths industry. Now, Brazil wants foreign investors to engage in processing and refining locally and to share technology, said Eracy Lafuente, a CIMCE member and chief of staff to the governor of Bahia state, a Lula stronghold.
The US, however, remains a key player and “will not be sidelined,” said Lafuente.
OPEN DOORS TO US AND CHINA
With China controlling the world’s largest rare earth reserves, securing access to supplies from has become a US policy focus.
Both the US and China have a lot to contribute to Brazil’s aims, said Lage, who represents mining municipalities on CIMCE. Even with a strong government push, there are limits to what can be done quickly in Brazil, said Ramon Barua, CEO of Aclara Resources (ARA.TO), opens new tab, which is developing a rare earths mine in Brazil’s central Goias state. The company is also working on technology for the separation of rare earths from waste material in the United States. “Even if we wanted — or even if President Lula wanted — to have separation in Brazil today, I don’t think that’s possible,” Barua said. “We need to acquire the technology first.”
Despite Brazil’s enormous potential, only the US government-backed Serra Verde mine — bought by USA Rare Earth (USAR.O), opens new tab in September — is commercially operating in the country, although it has faced technical challenges and the company does not expect it to reach full capacity until the end of next year.
Lula signed into law Brazil’s National Policy for Critical and Strategic Minerals about two weeks before the first round of voting. The move created CIMCE, kickstarting the regulatory framework overhaul, setting up investment incentives and risk-mitigation mechanisms for potential investors.
FIRMS SEEK CLARITY
Now the council — led by government officials along with outsiders such as Lage and Lafuente and industry representatives — will decide which minerals come under CIMCE’s purview, with rare earths set to be on the list. CIMCE has powers to ratify corporate control changes at companies holding mining rights for critical and strategic minerals and approve international contracts, agreements and partnerships involving the supply of critical and strategic minerals to ensure “economic or geopolitical security.”
The government will “move as quickly as possible so that these regulations can be presented within the first few months of 2027,” said Lafuente.
The Brazilian president’s Chief of Staff Office, which will preside over CIMCE, said work is under way on the new rules. Gabriela Salazar, a partner at the Azevedo Sette Advogados law firm, said the rare earth companies operating in Brazil that it advises do not oppose CIMCE or the new law. Instead, they want clear rules. Aclara CEO Barua welcomed the changes.
“I think the interest of the law isn’t to force anybody to invest in the later stages of the supply chain,” he said. “It’s to incentivize investment in those stages of the technology.”
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