The United States and China are increasing their overseas mining investments as they compete for minerals needed in artificial intelligence, electrification and other technologies. Brazil is among a small group of countries attracting money from both powers, alongside the Democratic Republic of the Congo and Kazakhstan.

The US strategy in Brazil has focused on rare earths. In September, USA Rare Earth, a publicly traded company in which the US government holds a stake, took control of Serra Verde, described in the source as the only producer outside Asia of four of the scarcest rare-earth minerals. The company has spent $2.8 billion on the acquisition. A further package arranged by the US Department of War, together with a loan from the Development Finance Corporation, is expected to bring the total US investment to nearly $5 billion.

Chinese investment in Brazil has been broader. Chinese companies invested about $6 billion in the country last year, more than in any other country, with roughly one-third going to mines producing minerals including nickel, copper and gold.

The surge reflects a wider contest for existing mines and projects that can be completed or brought back into operation relatively quickly. Last year, the Democratic Republic of the Congo, Brazil, Kazakhstan, Zambia and Canada accounted for nearly 80% of the two powers’ combined overseas mining investments.

The competition has also allowed host countries to seek better terms. In the Democratic Republic of the Congo, officials secured Chinese commitments to share more data and expand local mineral processing. Kazakhstan obtained a larger stake in a US-backed tungsten venture than Washington had initially offered, according to two US officials involved in the negotiations.

The strategy of prioritizing available assets has limits. Developing new mineral deposits can take a decade or more, while exploration budgets have not recovered from the end of the previous commodities boom. The source notes that government involvement by both powers can also complicate the price signals mining companies use when deciding whether to develop new projects. For countries with deposits already ready to exploit, however, the competition is bringing investment and the prospect of increased mining activity.

Sources: Folha Mercado.