Brazilian President Luiz Inacio Lula da Silva’s victory over far right Senator Flavio Bolsonaro in Sunday’s runoff, securing a fourth nonconsecutive term, reinforces government control over the country’s rare earth resources and raises the stakes for foreign miners and for Washington’s effort to reduce dependence on China. In his victory speech Lula said the country “will not accept being anyone’s backyard,” signalling continued resistance to pressure from the Trump administration, which has imposed higher tariffs on Brazilian goods.
The geology is why the politics matter beyond Brazil. The country holds the world’s second largest rare earth reserves, estimated at 21 million tonnes by the US Geological Survey, behind only China, in materials used in electric vehicles, wind turbines and defence technology. Interest is already intense: records from Brazil’s National Mining Agency through June show foreign owned companies filed 42 percent of the country’s 2,727 rare earth exploration applications, led by investors from Australia, the United States and Canada, and more than 86 percent of applications were submitted in the past three years. The country’s only commercial rare earth producer, Serra Verde, was acquired by USA Rare Earth, in which the US government holds a 10 percent stake.
Analysts quoted by Mining.com were measured about the change. Juan Ignacio Guzman of GEM Mining Consulting said the win “reinforces Brazil’s trajectory” and confirms the critical minerals policy launched in September 2026 rather than signalling a major shift. That policy creates a framework for greater government scrutiny of strategic mineral assets, including changes in corporate control and international supply agreements. Mining lawyer Adriano Drummond Trindade of Mattos Filho said the industry’s concern is implementation, not the election itself: investors accept screening “as long it is predictable, applied with consistency and in timely fashion.”
The policy also carries money for compliance. Provisions include tax credits of up to 20 percent for eligible processing, transformation and urban mining spending, capped at 1 billion reais, about $192 million, a year from 2030 through 2034, for projects the government approves. The Ministry of Mines and Energy told Mining.com it is working to create a favourable environment for beneficiation, separation, processing, refining and advanced materials manufacturing inside Brazil.
Jurisdiction watch: this is value capture industrial policy, not expropriation. No licence, royalty or ownership rule changed on election night. What changed is who writes the implementing regulations for screening and local processing, and that the administration that negotiated the policy now owns its rollout. The contrast with Flavio Bolsonaro, who favoured strategic critical minerals cooperation with Washington, is the negotiating backdrop for every US backed project in Brazil for the next term, which begins on January 5, 2027.