Brazil and the European Union, two economic giants on opposite sides of the Atlantic, are finding themselves at the center of a global tug-of-war over critical minerals. As the world pivots to electric vehicles, renewable energy, and advanced technology, the demand for rare earths and other essential minerals has soared. But the way these resources are sourced, processed, and traded is now shaping not just economies, but the very balance of global power.
For Brazil, the stakes have never been higher. As of September 17, 2025, the country faces a strategic crossroads. Its vast mineral wealth could propel it to the status of a strategic power—if leveraged wisely. Yet, as detailed by Leonardo Coutinho in The China First Doctrine (LinkedIn, August 1, 2025), Brazil risks remaining “trapped as a raw material supplier in China’s sphere of influence.” The administration of President Luiz Inácio Lula da Silva has been deepening ties with Beijing, most notably through expanded BRICS cooperation and ambitious infrastructure projects. But critics warn that these moves could lock Brazil into a subordinate role, exporting unprocessed resources while the real value—and technological advancement—flows abroad.
One project stands out as emblematic of this dilemma: a new railroad linking Brazil through Peru to the Chinese-controlled Port of Chancay. According to Coutinho, Brazil has “committed millions in taxpayer funds to building regional infrastructure that complements China’s strategic investments.” Ostensibly, this is about regional development. In practice, it means Brazilian minerals will flow straight to Chinese processors, bypassing opportunities to add value at home. “The central axis of the Chinese plan to reconfigure trade routes between South America and Asia will only be viable with the massive involvement of South American countries,” Coutinho notes. The upshot? Brazil risks cementing its role as a raw material exporter, not a high-tech powerhouse.
Robert Muggah, in his analysis Brazil’s Critical Minerals Moment (LinkedIn, August 18, 2025), argues that Brazil should be a “cornerstone supplier” rather than a “warehouse of stranded potential.” But that vision is hard to realize if China’s strategy prevents Brazil from developing the downstream processing industries—like refining, chemical conversion, and manufacturing—that capture most of the value. Muggah warns, “without investment in midstream separation, metals, magnets and chemical conversion, Brazil will export concentrates while most of the value accrues offshore.”
Meanwhile, the European Union faces its own mineral crisis. As of September 16, 2025, production lines in Germany, France, and Italy are slowing down, even shutting temporarily, because of China’s export controls on rare earth minerals and related magnets. In April 2025, Beijing imposed new licensing requirements for seven rare-earths and related magnets, critical for the automotive, defense, and energy sectors. Companies now need permits from China’s Ministry of Commerce, causing significant shipment delays. Despite a July 2025 summit where Chinese President Xi Jinping promised European Commission President Ursula von der Leyen that licenses for critical raw materials would be fast-tracked, approvals have since slowed. Less than a quarter of over 140 applications have been approved, with European firms reporting mounting complaints and losses.
China processes about 90% of the world’s rare earth minerals, making it a choke point in global supply chains. European automakers and chipmakers, heavily reliant on steady rare earth flows, are now grappling with production delays and parts shortages. The European Parliament has condemned China’s restrictions as coercive, calling them a threat to the bloc’s economic security. In response, Brussels is racing to implement its Critical Raw Material Act, aiming to diversify supplies, boost domestic processing, and build strategic stockpiles. But experts caution that this transition will take years, and emergency relief is needed to avoid further industry shutdowns.
Back in Brazil, the BRICS framework—once touted as a way to counterbalance Western dominance—now looks increasingly like a vehicle for Chinese influence. At the 2025 Rio summit, President Lula proposed a BRICS-exclusive submarine cable system, a move Coutinho describes as an attempt to “establish a parallel online ecosystem governed by countries largely composed of authoritarian regimes and dysfunctional democracies.” This digital infrastructure, critics say, could further entrench Brazil’s subordination to Chinese technological standards.
There are alternatives. Argentina, under President Javier Milei, is cited by Coutinho as a model for how Latin American countries can maintain profitable trade with China without ideological alignment. Argentina has not only increased its exports to China but also pursued new trade agreements with the United States, safeguarding its sovereignty and diversifying its partnerships. This balanced approach, Coutinho suggests, could help Brazil realize Muggah’s vision of resource-based leverage—if it’s willing to break with the current ideological framework.
Brazil’s clean energy grid—90% renewable—could give it a reputational edge in midstream processing, especially in areas like rare-earth separation, lithium chemicals, nickel sulfate, and graphite anodes. Muggah points out, “processing powered by hydro and bioenergy scores better on Western ESG screens than coal-fired equivalents in Asia.” But if infrastructure like the Chancay corridor funnels Brazilian minerals straight to Chinese processors, these advantages will benefit China, not Brazil.
The timing is critical. The “AI era,” as Muggah calls it, is pushing demand for critical minerals to new heights. Data-center build-outs and electrified logistics are accelerating, and if Brazil commits its exports to Chinese-controlled infrastructure before developing its own processing capacity, it may miss a once-in-a-generation window of opportunity.
There’s also a growing environmental imperative. Muggah warns, “any perception that licensing guts safeguards or that deforestation rises with mining logistics would swiftly puncture ‘green’ claims.” Democratic partnerships—like the Minerals Security Partnership framework—offer a path to responsible development, with joint R&D, shared stockpiles, and rigorous audit protocols. These could help Brazil add value at home while protecting its environment and reputation.
Brazil’s niobium industry offers a glimpse of what’s possible. The country controls 97% of the global supply via CBMM, and its technological edge and long-term contracts have made it a key player in high-strength steels and emerging battery chemistries. This dominance was achieved by developing domestic processing, not just exporting ore. Replicating this model for other critical minerals could provide Brazil with real leverage in global supply chains.
As Coutinho puts it, “the United States has drawn a line. The question is: does Brazil know which side it stands on?” Recent U.S. sanctions, including tariffs and Magnitsky Act designations, are seen as warnings to Brazil to avoid strategic subordination to China. Democratic partners like the United States, India, and the EU are eager to diversify their own supply chains and could support Brazil’s efforts to build domestic processing industries—if Brazil chooses to engage.
The global scramble for rare earths and critical minerals is reshaping alliances, industries, and the environment. Brazil and the EU both have the resources and the strategic importance to shape the future. But as the world’s demand for clean energy and advanced technology accelerates, the choices made today will determine whether they become indispensable partners—or remain at the mercy of others’ ambitions.