Roberto Xavier, ADIMB's Executive Director, traces the Australian-Canadian connection in the race to expand into Brazil
Francisco Alves
What did trigger the sudden rush in Brazil to acquire minerals considered as critical for the energy transition, such as lithium and rare earths? "First of all," says Roberto Perez Xavier, Executive Director at ADIMB (Agency for the Development and Innovation of the Brazilian Mining Sector), "most of the companies now targeting these two commodities, in Brazil, are junior mining companies from Australia and Canada, two countries that have extensive experience in mineral exploration, in the discovery of deposits, and in the development of mining. They are mature countries in the mineral sector industry.
"And it is in the nature of junior mining companies," he adds, "to do exactly that: to hunt around for opportunities, regardless of geographic location. These companies understand the risk. They know how to manage the high risk inherent to mineral
exploration, because they are also aware that there is the potential for substantial returns. This is particularly noticeable at moments like the present, when the mining industry is booming all over the world, mainly due to the demand for critical minerals that are important for the development of low-carbon technologies and clean energy generation. There is an estimate that the market for these critical minerals should be worth around US$ 1 trillion by 2030. That means the financial support is available for this business.
Xavier, a geologist with extensive expertise in economic geology and mineral deposits, notes that both Australia and Canada possess consolidated, well-structured, mature mechanisms for raising funds on the stock exchange. "They have a culture of developing projects in the mining industry," he says. "In fact, within the investment funds in Canada and Australia, we find technically qualified personnel acquainted with mineral exploration and mining, enabling them to conduct a better evaluation of these projects."
Thirdly, he mentions that there may be a concern about reducing dependence on the geopolitical control of some countries for commodities such as lithium and rare earths. "In particular," he notes, "this is the case of China, which supplies 99 percent of the worldwide demand for rare earths. China is also the world's third largest lithium producer."
The choice of Brazil as a destination for these companies can be attributed to several other considerations as well, Xavier says. He highlights the creation of the ANM (National Mining Agency). While conceding that there remain many structuring problems to be overcome, he points out that it has made an improvement. "We now have a little more agility in the processing and approval of mineral exploration applications, and this gives companies a sense of legal security. Another upside is the auction system for awarding new contracts in available areas, in cases where the original company failed to comply with the ANM's protocol for the permits and consequently lost its rights. The area is then made available for auction, which is a good thing. I am not making a value judgment here, but simply stating that the fact exists and that it can be a positive factor for attracting these companies."
A further improvement, he notes, is that state governments are seen to be speeding up their procedures for issuing environmental licenses, particularly in those states where mining makes an important contribution to the local economy. This is the case, above all, in states such as Minas Gerais, Bahia, Pará, Goiás, and Mato Grosso. "This improved dynamic in environmental licensing," he says, "may be another factor that ends up adding value, being an additional incentive for the arrival of junior mining companies."
Finally, there is Brazil's geological potential for lithium and rare earths, which to this day remains underexplored. "In the case of lithium, I usually say that several years ago, no one really paid attention to this metal, due to its very limited market. It was in the fourth division of the world commodities championship. Today, it has moved up to the Champions League, occupying a leading position, with huge investments. Brazil's enormous potential has attracted junior companies, offering fertile ground for research projects, especially in greenfield ventures.
As a result, Brazil is now the fifth largest lithium producer worldwide and is in seventh or eighth place in terms of world reserves. In the case of rare earths, Xavier notes that Brazil has the third largest reserves in the world, at 21 million tons, or about 18.2 per cent of the world total. However, Brazilian production is still only on a modest scale, with one single company fully in operation so far.
Geological potential
Brazil's geological potential for lithium is significant though underexplored, Xavier says. "Today, 85 percent of the country's total reserves are found in one small area, the Jequitinhonha river valley in the northeast of Minas Gerais. The two main municipalities are Araçuaí and Itinga. We should remember that lithium in this case is extracted from a mineral, spodumene, which is a lithium-rich aluminium silicate occurring within a specific igneous rock, named pegmatite. The latter consists mainly of quartz, feldspar and mica, in addition to several other minerals, including spodumene. That is why we use the term 'hard-rock lithium'.
The Jequitinhonha valley region is in a geological province that is rich in pegmatites, named the Eastern Brazilian Pegmatite Province. It covers an area of approximately 150,000 square kilometres (58,000 square miles) in parts of three states: the northeast of Minas Gerais (basically 90%), the south of Bahia, and the north of Rio de Janeiro.
In this region, Australian and Canadian companies are currently very active in different stages of lithium exploration. At the same time, there are other regions where lithium-bearing pegmatites exploration is also quite intense. This is the case of the Borborema Mineral Province in Northeast Brazil, in particular the Seridó belt, which includes the Rio Grande do Norte and a small part of Paraíba, and the Solonópole region in Ceará. Xavier also mentions the central region of Brazil, in particular the states of Tocantins and Goiás, whose potential remains underexplored.
In the case of the rare earth elements, the potential is equally great, in Xavier's assessment. "Why? Because today the cutting-edge frontier, as I understand it,
In rare earth elements exploration space, both in Brazil and worldwide, is narrowly focused on a specific type of deposit where REEs are hosted in regoliths. These are weathering mantle, unconsolidated material that forms above previously rare earth element-enriched hard rocks, such as alkaline igneous rocks or alkaline granites. This is where the rare earths are found, especially the heavy rare earths that have greater value on the market due to their technological applications. This is the case of Neodymium, Praseodymium, Dysprosium, and Terbium. In these regolith deposits, these rare earths are not locked within the structure of the minerals. On the contrary, they are found in the ionic adsorption form, loosely bound on the surface of clay minerals (ionic adsorption-clay type deposits). These deposits are shallow, because they form almost close to the surface, and the extraction of rare earths, in this case, is more easily achieved using saline solutions rather than acids. This means, in turn, that it causes much less environmental disturbance, making extraction much easier and the cost much lower.
In addition, radioactive materials such as uranium and thorium – which are commonly found in association with rare earths – are generally present in deposits of this kind only in very low concentrations.
All these factors are drivers to the significant exploration boom in regolith-hosted rare earth element deposits in Brazil, conducted mainly by Canadian and Australian junior companies. Today, these companies are focusing exploration for these deposit type in several geological settings in Brazil, in particular the Poços de Caldas alkaline rock complex in the south of Minas Gerais and granites within the Goiás Tin Province in the northern portion of the Goiás State and in the southern tip of the Tocantins State. Emerging potential regions also include the Alto do Parnaíba alkaline complex between Goiás and Minas Gerais; granitoids of the Jequié Block, southern Bahia; volcanic and sedimentary rocks in southern Amazonas, and granitoids from the Ribeira Valley region, southern São Paulo. Collectively, there might be several tens of targets under exploration, but only a very few projects have advanced to feasibility stage.
Nevertheless, very little geological and mineralogical information is publicly available on these deposits, as for example showing the proportion and distribution of rare earths adsorbed onto clay minerals, critical factors in determining the economic viability or guiding metallurgical processing pathways.
All in all, the potential for rare earth elements in this type of regolith-hosted deposit in Brazil is enormous. We're definitely looking at the possibility of becoming a major global player. But we need to know more about these deposits in Brazil and this can be done via collaborative projects joining academia and the private sector, as ADIMB is currently doing with Meteoric Resources in its Caldeira project.