Summary
In March 2026, US Chargé d’Affaires Gabriel Escobar signed a memorandum of understanding with the Brazilian state of Goiás on critical minerals and rare earth extraction.
There was no scheduling conflict.
Key points
- In March 2026, US Chargé d’Affaires Gabriel Escobar signed a memorandum of understanding with the Brazilian…
- There was no scheduling conflict.
- The US International Development Finance Corporation has now committed more than $565 million to critical minerals…
- Brazil holds the world’s second-largest rare earth reserves — approximately 21 million tonnes.
In March 2026, US Chargé d’Affaires Gabriel Escobar signed a memorandum of understanding with the Brazilian state of Goiás on critical minerals and rare earth extraction. No senior member of Lula’s federal government attended. The White House described it as a significant step forward in securing US access to strategic materials. The Brazilian Foreign Ministry said there had been a scheduling conflict.
There was no scheduling conflict. The signing was a deliberate bypass of the Lula government — and both sides knew it.
The Context: $565 Million and Counting
The US International Development Finance Corporation has now committed more than $565 million to critical minerals extraction projects in Brazil. The DFC financing is structured to work regardless of whether Lula’s federal government formally endorses the bilateral framework. By going to Goiás — whose governor, Ronaldo Caiado, is one of the most prominent anti-Lula voices in Brazilian politics and has been mentioned as a potential 2026 presidential candidate — the US secured access to lithium, niobium, and rare earth deposits in the state’s mineral-rich interior without requiring Brasília’s cooperation.
Brazil holds the world’s second-largest rare earth reserves — approximately 21 million tonnes. It supplies over 90% of global niobium, a metal critical for high-strength steel and increasingly for battery technology. It is the largest external source of alumina for the United States. The strategic logic of ensuring US access to Brazilian minerals is strong and bipartisan in Washington — this is not a purely Trump-era policy, though the Trump administration has executed it more aggressively than its predecessor.
What Lula Wants — And Why Washington Has Stopped Listening
President Lula’s core demand in any minerals partnership with the US has been consistent: Brazil will not simply ship raw ore or minimally processed material to American facilities. Any deal must guarantee domestic processing — value-added manufacturing on Brazilian soil — rather than raw extraction that enriches foreign refiners while Brazil receives only mining royalties.
That is a reasonable demand for a resource-sovereign country. It is also a demand that significantly raises the cost and complexity of any bilateral agreement for the American side, which wants to reduce dependence on Chinese rare earth processing capacity as quickly as possible and is not primarily interested in building Brazilian industrial capacity in the process.
The relationship deteriorated sharply in early 2026. The Trump administration’s attempt to send adviser Darren Beattie to visit jailed former president Jair Bolsonaro in a Brasília prison caused a diplomatic crisis. Lula’s government revoked Beattie’s visa. Washington responded by imposing 50% tariffs on most Brazilian imports. The federal-level minerals partnership stalled.
The Subnational Workaround
Signing with Caiado’s Goiás government is textbook resource extraction geopolitics. It is the same logic that China applied in Africa — signing infrastructure and resource deals directly with cooperative regional authorities or state-owned enterprises when federal governments were reluctant or unreliable partners. It leverages Brazil’s federal structure, which gives state governments significant authority over their own territory, to extract what Washington needs without giving Lula the political win he is demanding.
The practical result: US financing is committed, mining operations can proceed, and the rare earths will reach American processors without a Lula-endorsed federal framework. Whether Lula can or will legally contest the Goiás deal — and whether the DFC investments survive a potential Lula re-election or successor government in 2026 — are open questions.
The POV
The US is using Brazil’s political geography against its own federal government. The strategy is not subtle. By making Caiado the face of the partnership, Washington simultaneously advances its minerals access agenda and strengthens one of Lula’s most significant domestic rivals ahead of what is expected to be a competitive Brazilian electoral cycle. This is resources, geopolitics, and domestic political interference rolled into a single MOU signing. Lula described the critical minerals partnership as the “core of a pioneering agreement” in public — and watched the Americans sign it with his political opponent. The gap between what Lula said and what happened is the whole story.
The minerals deal also matters for what it excludes. China has spent the last decade building deep infrastructure relationships across Latin America, and Brazil’s resource sector has been a primary target. A formal minerals partnership with Washington does not automatically displace Chinese investment — Brazil has made clear it intends to maintain independent relationships with both powers — but it does create competing claims and leverage points that did not exist before. For Washington, locking in Brazilian supply for even a portion of critical mineral needs reduces the vulnerability that became painfully visible when Iranian disruptions tightened global commodity markets. The deal is small now; its strategic logic points toward much larger commitments to come.
What this means
The US International Development Finance Corporation has now committed more than $565 million to critical minerals extraction projects in Brazil.
Brazil holds the world’s second-largest rare earth reserves — approximately 21 million tonnes.
Bottom line
President Lula’s core demand in any minerals partnership with the US has been consistent: Brazil will not simply ship raw ore or minimally processed material to American facilities.