Governments Become Mineral Shareholders

Brazil has chosen continuity, and its rare earths are part of the bargain. Luiz Inácio Lula da Silva beat Flávio Bolsonaro in Sunday's runoff, MINING.COM reported, taking 51.8% of valid votes to 48.2%, according to the electoral court cited by The Northern Miner. Bolsonaro has refused to concede. Lula's next term begins Jan. 5, 2027, and it extends an industrial policy built to keep more mineral processing and manufacturing at home.

That matters beyond Brazil because everyone else is converging on the same idea. Governments that spent a decade writing procurement guidelines and permitting rules are now taking equity, building stockpiles and vetting who owns what. Brazil, the European Union, the United States and the World Bank are each doing a version of it. The question is who captures the value once the metal leaves the ground.

Brazil keeps the keys

Brazil holds the world's second-largest rare earth reserves, estimated by the US Geological Survey at 21 million tonnes, trailing only China, MINING.COM reported. Lula's victory speech was aimed at Washington, where the Trump administration has imposed higher tariffs on Brazilian goods. "This country will not accept being anyone's backyard," he said.

The policy machinery is already in place. The critical minerals law, enacted Sept. 16, provides for screening changes in corporate control, significant foreign participation and international supply agreements that could affect national security, The Northern Miner reported. The law also offers tax credits of up to 20% for eligible processing, transformation and urban-mining spending, capped at 1 billion reais ($192 million) a year from 2030 through 2034. A September decree set up the new minerals council. The detailed screening procedures and incentive requirements still wait on implementing regulations, which is where the real bargaining happens.

Foreign capital is already in the queue. An analysis by The Associated Press and Repórter Brasil of National Mining Agency records through June found that subsidiaries of foreign miners and companies with foreign ownership stakes accounted for 42% of Brazil's 2,727 rare earth exploration applications, The Northern Miner reported. And the country's only large-scale rare earth producer, Serra Verde, now belongs to a US-listed company. USA Rare Earth completed its combination with Serra Verde on September 3, 2026, according to Nasdaq, and has secured agreements for up to $1.6 billion in US government support, The Northern Miner reported.

Serra Verde began production in Goiás in January 2024. Its first expansion stage is expected to reach a run-rate of roughly 4,000 tonnes a year of total rare earth oxide by the end of 2026, with a second stage targeting 6,400. The USA Rare Earth release calls it the only scaled producer of all four magnetic and other critical heavy rare earth elements outside Asia.

Juan Ignacio Guzmán of GEM Mining Consulting told MINING.COM: "Brazil is currently viewed as a strategic partner of the United States in the global race for critical minerals." Brazil is courted by Washington and wary of it at once, and the screening law gives Brasília a way to decide which of those it is at any given moment.

Washington buys in

The American model is a balance sheet, and it has two parts. The first is equity. The US government committed US$400 million to MP Materials in a deal that could give it a 15% stake, an investment that Financial Times sources say has shaped Europe's thinking, according to Mining.com.au.

The second is the stockpile. On September 23, Glencore and Mercuria became the first two participants in VaultCo, the company implementing Project Vault, and together committed $1 billion to procure and stockpile critical minerals, according to CSIS. The US Export-Import Bank approved up to $10 billion in long-term financing, complemented by nearly $2 billion in private investment. CSIS stresses that VaultCo is an independently governed private company rather than an EXIM program. EXIM sits on its board only as a noncontrolling observer, and drawdown decisions rest with participating manufacturers. Unlike the National Defense Stockpile, which primarily serves defense needs, Vault is designed around the broader industrial base.

Bloomberg reported that Project Vault is preparing to lend up to US$1 billion to US manufacturers for raw material purchases. Executive Chairman Brett Lambert said VaultCo is talking to more than 70 companies along the supply chain. Buyers are asking for specialised magnets, powders and alloys, and Lambert told Bloomberg that "the specificity of the requests have surprised me."

Not everyone is convinced. Fastmarkets reported concerns over Vault's commercial purpose, and two market sources pointed to the lack of clarity over its pricing strategy, including whether it has a price floor. A stockpile without a stated price is a buyer the market cannot read.

Magnets show the other risk. General Motors has cancelled a supply agreement with a US rare-earth magnet plant whose owner, Energy Fuels, has agreed to buy it for US$1.9 billion (C$2.7 billion), The Northern Miner reported. GM had been expected to take 90% of the output of the US$500-million South Carolina plant run by e-VAC Magnetics, a unit of Germany's Vacuumschmelze, Reuters reported. According to an Energy Fuels filing, the customer gave notice of termination on July 1, and VAC began arbitration on July 7, seeking to have the cancellation declared wrongful. Energy Fuels still expects the deal to close in 2027. The plant has annual capacity of 2,000 tonnes of permanent magnets, and its anchor customer has walked away from it. Public money can underwrite a mine, but it cannot guarantee that a buyer keeps its word.

Brussels and the bank

Europe is copying the playbook. Members of the European Parliament backed a proposal to create a Critical Raw Materials Centre with powers to invest in mining, processing and recycling projects, the Financial Times reported, as relayed by Mining.com.au. The centre could take stakes in companies important to Europe's supply security and oversee strategic stockpiles. S&P Global put the vote at 470 to 83, with 108 abstentions, on 20 October.

The proposal includes a €2 billion fund under the EU's next long-term budget, though member states would have to approve it. By 2030, the bloc wants to meet at least 10% of its annual strategic raw materials consumption through domestic extraction, 40% through processing and 25% through recycling. Companies would have to map their supply chains, assess vulnerabilities and present the results, Euperspectives reported. Rapporteur Mohammed Chahim said critical raw materials are "not just an economic asset; they are a strategic necessity." The final text will come from negotiations between Parliament and the Council.

The World Bank is moving too. At the annual meetings in Bangkok, President Ajay Banga said: "In critical minerals, we plan to quintuple our business in five years." The bank's new Metals and Minerals plan targets US$19 billion in critical minerals financing over fiscal 2026 through 2030, compared with US$3.6 billion from fiscal 2021 through 2025, according to Reuters, as carried by Mining.com.au. Banga said the lender has identified 20 countries it can partner with, and that its first country compacts aim "to build local industries and keep more jobs and value at home."

That is Brasília's pitch, delivered by the planet's biggest development lender. The US, the bank's largest shareholder, wants more money for critical minerals, including deep-sea mining, according to Treasury Secretary Scott Bessent. The bank's plan calls for a "precautionary approach" toward that sector.

One logic, four capitals

The pattern is plain enough. Washington takes equity and builds a reserve, Brussels wants its own, and the World Bank is financing producers' ambitions to move up the value chain. Brazil sits at the junction with one of the largest untapped deposits and a president who has just won a mandate to keep it that way. Every government now wants a share of the rare earths, and the country that holds them has just voted to decide who gets one.