The Rising Tide of Big Tech in Nuclear Energy and the Quest for Rare Earths
In the ever-evolving landscape of energy, a notable tale has captured headlines this month: the robust intervention of Big Tech in the nuclear energy arena. This surge has propelled nuclear energy stocks to unprecedented peaks, a phenomenon meticulously examined by my colleagues Jamie Smyth and Amanda Chu in their insightful coverage.
But that’s not all that beckons our attention. As we gear up for a significant gathering — the UN conference on biodiversity in Colombia — a staggering influx of businesses is anticipated. To grasp the full scope of this event, I highly recommend diving into Susannah Savage’s compelling Big Read.
Thank you for your readership!
Minerals Security Partnership Expands with Brazilian Rare Earth Project
On Monday, the U.S. Department of State lent its endorsement to a groundbreaking rare earths initiative in Brazil, marking yet another stride for the Minerals Security Partnership (MSP). This coalition, spearheaded by the U.S. and comprising 14 nations alongside the European Union, strives to present a formidable countermeasure against China’s overwhelming grip on critical minerals and rare earths.
China, with its dominance in processing myriad minerals essential for defense and the burgeoning energy transition, has prompted the MSP to forge alternative supply chains insulated from Beijing’s influence. The latest endeavor sponsored by the MSP — the Pela Ema deposit, managed by Serra Verde Group — serves as a testament to the coalition’s intentions. Yet, it simultaneously highlights the formidable challenges ahead in establishing resilient critical mineral supply chains.
In a noteworthy announcement on Monday, the Switzerland-based Serra Verde Group revealed a significant $150 million fundraising triumph, backed by prominent mining stakeholders including Denham Capital from Boston, the Houston-based Energy and Minerals Group, and Vision Blue, a fund led by the esteemed former Xstrata chief executive, Sir Mick Davis.
In words that resonate with ambition, the U.S. State Department asserted: "This investment is a powerful demonstration of the Minerals Security Partnership’s role in establishing sustainable, secure, and diversified supply chains.”
However, it’s crucial to note that, unlike China’s well-oiled funding machinery, the MSP lacks direct financial resources for its initiatives. Instead, it relies on inspiring private capital and state-funded entities, such as the U.S. International Development Finance Corporation and Natural Resources Canada, to marshal support for select projects brought to its table.
Since its inception two years ago, the MSP has championed over a dozen projects targeting elements like graphite, rare earths, and nickel. Currently, all rare earths from Serra Verde’s operations find their way to China’s processing plants.
While North America and Europe are embarking on the construction of various heavy rare earth processing facilities, China remains the sole global player adept at processing the specific heavy rare earths sourced from Serra Verde’s mine.
Nestled in Brazil’s Goiás state, Serra Verde’s mine extracts rare earths from ionic clay, including vital minerals for permanent magnets employed in electric vehicles and wind turbines, such as neodymium, praseodymium, terbium, and dysprosium. The mine began commercial production earlier this year, securing its position as the only active producer of heavy rare earths outside of China, as claimed by the company.
The benefit of sourcing rare earths from clay over hard rock lies in the simplified processing methods and the absence of crushing requirements, according to company representatives.
China currently reigns supreme as the leading miner of ionic clay rare earths, accounting for 60 percent of global production and 90 percent of processing.
Thras Moraitis, the chief executive of Serra Verde, articulated the significance of the newly acquired funds, stating they would “enable us to attain a scale that allows us to stand independently and compete economically.”
Yet, the specter of competition looms large; China’s ability to produce rare earths at low costs continually suppresses opportunities for new market entrants.
Gracelin Baskaran, director of the critical minerals security program at the Center for Strategic and International Studies, noted that MSP’s endorsement of Serra Verde reflects a broader warming of U.S.-Brazilian relations. Earlier this year, the IDFC opened its inaugural office in Latin America, located in São Paulo.
“Brazil boasts substantial yet largely untapped rare earth reserves, holding approximately 18 percent of the world’s total, yet its production remains a mere fraction, under half a percent,” Baskaran explained. “To truly appreciate the potential of rare earths, one must look to Brazil.”
— Leslie Hook