Lynas’ $672M Rare Earths Deal in Brazil Becomes First Test for New Critical Minerals Policy

Why it matters: This is the first real-world application of Brazil’s critical minerals governance apparatus, and the outcome will signal how the country intends to balance foreign investment against strategic resource control. With China concentrating roughly 80% of global rare earth refining capacity, governments worldwide are scrambling to secure alternative supply chains. Brazil holds significant rare earth deposits but has never produced at commercial scale with full downstream processing. How Cimce handles this deal will set the tone for every foreign-backed critical minerals project in the pipeline.

What Cimce still needs to decide, and what depends on it

The National Policy for Critical and Strategic Minerals created the institutional framework, but left the operational details to future regulation. Cimce has the legal mandate to approve corporate transactions involving critical mineral projects, yet the criteria for determining which deals require review, the thresholds that trigger scrutiny, and the timelines for decisions remain undefined. Until those rules are published, companies and investors face uncertainty about what conditions may be attached to approvals.

Lynas and Meteoric have reportedly engaged directly with the federal government and BNDES to avoid delays, according to Meteoric’s board chair Andrew Tunks. That preemptive outreach suggests the companies recognize the regulatory vacuum and are trying to navigate it through direct dialogue rather than waiting for formal guidelines. For Brazil, the risk is that acting before the rules are clear could either set an informal precedent that constrains future decisions or, alternatively, scare off investment if the process proves unpredictable.

What this changes for Brazilian mining and downstream processing

Lynas is the only company outside Asia capable of separating individual rare earth elements at commercial scale, the highest-value step in the supply chain. The company has stated it is studying the possibility of building processing and separation capacity in Brazil, which would represent a structural shift. Brazil currently exports raw or semi-processed minerals and imports finished rare earth products. If Lynas does establish separation facilities domestically, it would create the first vertically integrated rare earth operation in Latin America.

However, the commitment to local processing remains conditional. Lynas first needs to develop the mine itself, an investment of approximately US$ 500 million with production targeted for 2028. The separation facility is a separate, later-stage decision that depends on regulatory conditions, infrastructure, and economics. Brazilian policymakers face a tension: imposing local processing requirements could maximize domestic value but may also deter or delay investment in a sector where the country has no established track record.

Who gains and who loses

The clearest beneficiary is Lynas, which diversifies its supply base away from a single mine in Australia and gains a foothold in the Western Hemisphere. For Brazil, the potential gain is industrial development and a position in the global rare earth supply chain, but only if processing stays domestic. BNDES could emerge as a financing partner, channeling public credit toward a strategic sector.

On the other side, Meteoric’s executive director in Brazil, Marcelo de Carvalho, warned that extending Cimce review to every foreign capital raise could make it harder for junior miners to fund exploration and development. Smaller companies with critical mineral assets but no revenue may find themselves caught in regulatory processes designed for large transactions. The practical effect could be a consolidation of the sector around large, well-capitalized foreign players, the opposite of what a sovereignty-focused policy might intend.

via Reset