The relaunching of industrial policy in Brazil: What have rare earths got to do with it?

Abstract

With the purpose of reverting the process of premature ‘de-industrialization’ suffered by the Brazilian economy in the previous decade, the Lula III administration has embarked on implementing a new industrial programme using a ‘mission-driven’ design. Several of the missions prioritised by Nova Indústria Brasil, officially announced in January 2024, will imply a greater demand for rare earths and other critical minerals necessary both for the energy and digital transitions, and the defence industry –integral components of the ‘neoindustrialisation’ objectives contemplated in the missions to be accomplished. Furthermore, in a setting of global great power rivalry and exacerbated supply chain failures, the quest for securing access to critical minerals away from China is offering Brazil, a country with large reserves of rare earths, additional prospects for linking production of these minerals to industrial policy. But how is the Federal Government responding to this opportunity for economic upgrading in its rare earths sector? The question will be examined by comparing Brazil’s attempts at strategic management of rare earths over the 2010–2025 period within the context of President Rousseff’s Plano Brasil Maior, the absence of industrial policy during the Temer and Bolsonaro administrations, and the recently launched Nova Indústria Brasil.