Jose W. Fernandez, subsecretário de Estado para Assuntos Econômicos, Energia e Meio AmbienteJose W. Fernandez, subsecretário de Estado para Assuntos Econômicos, Energia e Meio Ambiente

(Reuters) – The U.S. government wants to invest in Brazil to extract so-called critical minerals needed to make clean energy batteries, Under Secretary of State for Economic, Energy and Environmental Affairs Jose W. Fernandez said on Tuesday in Brasilia.

“Brazil can be a mineral power at this moment when the world is thirsty for critical minerals,” said Fernandez, one of the top Joe Biden administration officials to visit Brazil since installing the Lula administration.

The American official said he had discussed with the Brazilian government the possibility of investment in the extraction of critical minerals, such as lithium, magnesium, copper, nickel, among others, crucial for the development of a low-carbon economy.

The supply of the type of material is a challenge for the green economic and energy transition, both because of the rapidly growing demand and in geopolitical terms, with China processing almost 90% of the rare earths and 60% of the lithium, a key element for batteries.

With this as a backdrop, in 2022 the US government formed an alliance with the European Commission and 11 other countries — Canada, Australia, Finland, Germany, France, Japan, South Korea, Sweden, the UK, Norway, and Italy — dedicated to acting in the chain of these minerals. The intention is to offer producing countries investment in the exploitation of these ores and, especially, to decrease Beijing’s worldwide dependence on the subject.

“The members of this partnership are very interested in the possibility of investment in Brazil,” said Fernandez. “We’ve talked to the Brazilian government about that and it’s something we’ll continue to talk about.”

A report by the U.S. think tank Brookings Institute shows that China is now responsible for refining 68 percent of the world’s nickel, 40 percent of copper and 73 percent of cobalt.

“You have a vulnerability in the supply chain in that sector. We learned what that means in the pandemic,” Fernandez followed.

The undersecretary also said that often in mining there is a race to the bottom — whoever can produce the cheapest, at the lowest cost wins — which ends up having a huge environmental impact.

“So what we are saying (to the countries where we want to produce) is that we are going to follow the environmental, social and governance standards that we follow in our countries. It’s not because we’re going to work in a new country that we’re going to associate ourselves with this race to the bottom,” he promised.

According to Fernandez, negotiations are being held between the alliance countries and some African countries, and at the moment 15 critical mining and processing projects are being analyzed.

According to the Brazilian Mineral Yearbook, the country currently has exploration of some of the main critical minerals, such as chromium, nickel, manganese, copper, among others, and is the world’s largest producer of niobium. However, the country would have deposits of all 50 critical minerals in the world, including lithium.

A 2022 report by the International Energy Agency estimates that demand for critical minerals will double by 2040 with current need.

However, if the world makes a real effort to meet the goals of the Paris Agreement on climate change, the need will quadruple, and a greater effort, to get to zero net carbon emissions by 2050, as several countries have committed to, would raise demand sixfold.

The demand for some minerals, such as lithium and manganese, will grow even more, and could reach 40 times what is produced today.

By admin