Lynas Rare Earths has presented plans to build a rare earth oxide separation plant in the Pocos de Caldas region of Minas Gerais, Brazil’s mines and energy minister Alexandre Silveira told Mining.com. The government is considering backing the project, and state development bank BNDES is evaluating potential financing, according to people familiar with the discussions. No financing structure or final investment decision has been set.
The proposal sits on top of Lynas’s expansion into Brazil through its $672 million acquisition of Meteoric Resources. That deal, announced on October 1 as an all-share scheme, gives Lynas control of the Caldeira ionic clay project in Minas Gerais. Lynas has been more cautious in its own investor statements, describing Brazilian downstream processing as a possible future investment and keeping the option of routing Caldeira material through its existing processing network in Australia and Malaysia.
Caldeira is the scale argument. Meteoric’s definitive feasibility study outlined a resource of 1.63 billion tonnes grading 2,317 parts per million total rare earth oxides, including an ore reserve of 151 million tonnes at 3,524 ppm. The study design averages about 12,500 tonnes of total rare earth oxides a year over a 23-year mine life, including neodymium-praseodymium and the heavy rare earths dysprosium and terbium, with initial development capital of about $498 million excluding a separate large-scale separation plant.
Officials see Pocos de Caldas as a potential regional processing hub that could handle material from other ionic clay projects in southern Minas Gerais, not only Caldeira. BNDES is expected to make a technical visit to Lynas’s Australian operations before the end of 2026. Silveira said the plant could be a milestone in moving Brazil beyond raw material exports.
The transaction will also be an early test of Brazil’s new critical minerals framework. Legislation enacted weeks ago created the National Council for the Industrialization of Critical and Strategic Minerals, which will help evaluate strategic transactions and coordinate incentives. The Lynas deal is expected to be among the first major cases considered under that framework, and its regulatory clearance will show how Brazil balances foreign mining capital against domestic processing commitments.