rare earth minerals
US President Donald Trump’s ‘tariff policy’ is currently creating trade turmoil across the world. Trump has mainly targeted the BRICS countries (Brazil, Russia, India, China and South Africa). But running the world on one’s own terms may not be as easy as Trump thinks. On this entire chessboard, Brazil has got hold of such a treasure, which can turn Trump’s entire game upside down. This treasure is buried under the soil of Brazil, which is called ‘Rare Earth Minerals’. This treasure is the biggest need of every major technological power of the world including America.
These minerals are like oxygen for companies that make electric cars, solar panels, smartphones, jet engines and even missiles. If Brazil makes this treasure its weapon, it can force America to bow down at the negotiating table.
After all, what are these ‘rare minerals’?
‘Rare earth minerals’ are not just one or two, but a whole group of 17 heavy metals. As the name suggests, they are not only ‘rare’ because of their availability, but the process of extracting them from the ground and purifying them (processing) is extremely complex and expensive. In today’s digital era, their importance has increased so much that they are not just minerals but have become a ‘geopolitical power’.
From the screen of the smartphone you are using, to the batteries of electric vehicles, to the huge wind turbines that generate electricity from air and the defense systems that protect the country, everything modern is dependent on these minerals. The one who has the reserves of these minerals and the technology to process them will be the king of future technology. This is the reason why all the big countries of the world want their control over them.
China is the real powerhouse of rare earth
Till now the biggest player in this game has been China. China not only has the world’s largest reserves of about 44 million metric tons, but it also has almost a monopoly in their production and purification. America has been largely dependent on China for its needs. But now China and America themselves are embroiled in a tariff war against each other. Recently, China took a big step and banned the export of technology related to these rare minerals, which has further increased America’s problems.
This is where Brazil enters. According to the United States Geological Survey (USGS), Brazil has the world’s second largest reserves, about 21 million metric tons. Brazil’s Mines and Energy Minister Alexander Silveira has seen this as a big opportunity. He clearly says that “there is a direct convergence of interests between Brazilian minerals and American capital.” That is, America needs an alternative to China and Brazil needs American investment for its economy. This is an opportunity that can make Brazil a ‘kingmaker’ in the global supply chain.
Will Trump-Lula talk?
This whole matter is not limited to just business, diplomacy and politics are also deeply involved in it. An important meeting can take place between US President Trump and Brazilian President Luiz Inacio Lula da Silva during the ASEAN summit to be held in Kuala Lumpur this weekend. President Lula has also said that he is ready to talk to Trump on every issue—be it Gaza, the Ukraine-Russia war, or most importantly, the rare minerals issue.
Currently, Brazil is struggling with the huge tariff of 50% imposed by America. This tariff was imposed after the coup trial of Lula’s previous rival and former President Jair Bolsonaro. Trump had termed the action taken against Bolsonaro (who was recently jailed for 27 years) as a ‘witch hunt’. Now Lula has an opportunity to use his ‘rare earth’ reserves as a diplomatic weapon and get relief from these heavy tariffs from America.
What is the advantage of this whole game for India?
Trump’s tariff policies have affected not only Brazil but also India. This common challenge has brought India and Brazil closer than ever. Both countries are now together looking for new markets to face American trade attacks and avoid tariffs. Both the countries want to increase their mutual trade manifold.
In such a situation, rare earth minerals can become a new and strong link in India-Brazil friendship. India is largely dependent on China for these minerals for its technology and automobile industry (especially electric vehicles). If India’s partnership with Brazil deepens, India can get a reliable source of these important minerals. This will not only reduce our dependence on China, but will also give new strength to ‘Make in India’. This can prove to be a profitable deal for both the countries.