Sacrifice Zones

Since Donald Trump announced in July that the US would impose 50 percent tariffs on Brazilian imports, there has been much speculation about the future of Brazil’s foreign trade, both with China and the US. One particular area of focus is the US interest in the exploitation of Brazil’s strategic minerals, as Gabriel Escobar, interim US ambassador to Brazil, made clear at a recent meeting with representatives of the mining industry. In the context of the domestic effort to develop a national policy on Critical Minerals, Finance Minister Fernando Haddad has indicated that critical minerals could be one possible area of trade with the US.

Among the critical minerals now in focus are rare earths, a set of seventeen metals with high magnetization capacity, essential for the production of electronic components, batteries, and wind turbines, which make up the most advanced hub in tech innovation and a key component in the race for energy transition. Another area of growing demand is the military, where these metals are used for creating the strong magnetic fields necessary for drones and ballistic missiles. Not surprisingly, a recent discovery of rare earth deposits in Poços de Caldas, in the state of Minas Gereis in Brazil’s southeast, has already attracted more than 100 exploration requests to the National Mining Agency (ANM).

Daniel Tygel is a former councilman for Caldas, a city close to Poços de Caldas, equally rich in critical-mineral reserves. A key figure in the movement against rare-earth extraction in southern Minas Gerais, Tygel spoke with Rosa Magazine and Phenomenal World about the topic.

Here we present a summarized edition of the interview, which first appeared as a podcast published by Rosa. The discussion ranges from the environmental impacts that rare-earth mining entails, especially in “sacrifice zones” like Minas Gerais, to the geopolitical tensions that fuel such mining. The conversation was attended by the editors of Rosa Magazine, Arthur Hussne, Lucas Braga, Marcela Vieira, and Marina Bedran; Luciana Dias Bauer, founding lawyer of JusClima; Stélio Marras, anthropologist and professor at the Institute of Brazilian Studies at the University of São Paulo (IEB-USP); and Hugo Fanton, editor at Phenomenal World.

An interview with Daniel Tygel

Marina Bedran: How do today’s mining practices in Minas Gerais differ from earlier periods? What is unique about the exploitation of rare earths?

Daniel Tygel: We are on the volcanic plateau of southern Minas Gerais, or the Poços de Caldas volcanic plateau, which is a gigantic crater. Thanks to the volcanic activity of the past, the region today is home to very special fauna and flora. The land has high levels of acidity, containing heavy metallic elements like uranium, which attracted mining attention early on, even before Brazil developed its nuclear industry. This mining, closely linked to the military dictatorship and carried out at breakneck speed, was a source of national pride.

We are the largest open-pit uranium reserve on the planet, home to 100 million tons of heavy metals, of radioactive metals. Thanks to anxieties about radioactive waste, enthusiasm for new energy sources has a long provenance in the state, dating back forty years. Caldas has been celebrated as the future because it exported uranium to Brazil and the world. Now, once again, the region is being coveted because of the green energy revolution and NATO’s renewed military interest.

The rare earths here were discovered in the 1990s by a group of Japanese researchers. The discovery did not originally attract much attention, even as China had pronounced its stakes in rare earth minerals as early as 1992. It would take until much later for four Australian companies to show interest in the area.

With the crimes taking place in Brumadinho and Mariana, the question of dams in Brazil has gained prominence. Companies have adopted phrases such as “green mining,” which does not use explosions or dams and contributes to the energy transition. In this new phase, it is small companies that are approaching the environmental licensing process. This is something very different, because it seems that they have expertise in Brazilian legislation, communication, and co-opting regional powers and communities. But these companies, even though they are small, are already publicly traded. With so much geopolitical interest surrounding rare earths, smaller companies are ready to be taken over by traditional mining companies with greater operational capacity. The two companies that are most advanced in environmental licensing here in the region have capital of USD 20,000, which is totally inadequate. The big geopolitical question is, who will take control of these smaller companies. It is said that, on its own, this region can supply 10–20 percent of the world’s demand for rare earths.

Marcela Vieira: There is coordinated action by companies to legitimize these projects. For example, students at the public school in Poços de Caldas are taking classes on rare earth extraction and how it will bring more progress to the city with minimum environmental damage. The people teaching these classes are not affiliated with the school or the city government; they are people from the company itself. Given this, who can we turn to?

DT: The only thing that can stop a mining project of this size is the local community proving that we are not a sacrifice zone. In ancient, pre-medieval cities, when they killed a calf to collect its blood and save the harvest, the calf was sacrificed for the good of everyone. The only one who could try to escape this fate was the calf itself, by crying out loudly. Unfortunately, this is our situation. There is a long history of clashes with mining companies, and we have had some great victories. In this case, however, the companies will be trying to move as quickly as possible. It’s part of their strategy to make communities feel that there is no way to fight back because there is nothing else to be done. Our strategy is to say that there is indeed something to be done, there are still a number of steps to be taken.

There are two major regulatory fields: mining law and environmental law. In practice, this means that any new projects need to undertake two distinct administrative processes: acquiring the mining concession and obtaining environmental licensing. Mining law is a fait accompli because it is based on the premise that the subsoil is the responsibility of the federal government. Those who inhabit or own the land above do not own the minerals below. The National Mining Agency (ANM) has already granted mining rights in cities like Poços de Caldas, Caldas, Andradas, and Águas da Prata. There are guaranteed mining rights underground even on the land where Caldas’ main church is located. Once ascertained, companies are under no obligation to even disclose the fact that they’ve gained legal access to a particular area, arguing that the location is a “trade secret.” Gaining rights on its own, however, is not enough to begin extraction.

Environmental rights relate to what happens on the ground, not just underneath it. The law inscribes protections for certain areas, such as traditional communities, urban areas, and “permanent protection areas.” That’s where the trouble starts. Often, when the municipality is asked to issue a certificate of use and location—the only formal statement the municipality makes—companies say they already have the right to mine. But this is not true because they also have to get the permission of the Environmental Protection Council, which issues the opinion that supports the city’s decision. If there is local mobilization, it is possible to put pressure on municipal authorities, especially the executive branch, to negotiate the granting of this certificate of use and location. Caldas has already issued the certificate to the company Meteoric, and Poços de Caldas has issued a certificate to Viridis. But there is a petition underway in Poços de Caldas that asks the mayor to listen to the public and review his decision, because every administrative act of the Executive Branch is subject to self-regulation, so it is possible to revoke or suspend the certificate of use and location. Therefore, if there is mobilization to make a certain aspect related to this mining unpopular, it is possible to create mechanisms for negotiation.

But there is a timing problem: these two mining activities will peak during the next municipal election process, and the burden will begin later, in the following administrations, six to eight years from now. The peak bonus is during the construction of the ore treatment plant, which absorbs a large workforce for about ten months, which will coincide precisely with the election process. For example, there are 1,000 direct jobs during the construction process in Poços and another 1,000 in Caldas, but after that, during operation, this falls to 170 direct jobs. That is very little. Compare it with Alcoa, for example, where for 500,000 tons of ore there are 600 workers. Here there will be 180 workers to exploit ten times more, five billion tons.

At this point, we have to resort to mobilizing and raising awareness among the population so that they realize that the gains are not that significant. Caldas has been home to mining for a long time and its Human Development Index (HDI) has not grown in relation to Campestre, to take one example, which is a municipality of the same size and has invested in coffee, a product whose gains are renewed over several harvests and which brings far less environmental destruction.

In terms of stopping these projects, we need to organize impact studies from technical experts. Another path is to appeal to the Public Prosecutor’s Office, although this is difficult as it usually won’t take action until the damage has already happened. The central element in all of this is time. The company is in a hurry, so we need to buy time so that people can better understand what this mining process is all about.

Luciana Bauer: There seem to be speculative bubbles around critical minerals. In addition, there is an ongoing arms race for which these minerals are essential. How should Brazil be considered in this context?

DT: Brazil ranks second in the world in known rare earth reserves. The BRICS countries, now with the addition of Vietnam, possess most of the reserves of these so-called critical minerals. And there is a lot of speculation going on because it is being seen as a “new oil,” and an opportunity to make a lot of money from fluctuations.

Brazil is practically invisible in the international media, despite our weight in terms of wealth, GDP, population, and even market share. I am struck by the way Brazil is sidelined, and this has to do with our growing relationship with China and with the logic of BRICS, of so-called multilateralism. We are in a very dangerous zone: global governance mechanisms are failing, but new structures, such as BRICS, are unable to provide direction or replace existing multilateral organizations.

The mining of rare earths cannot be separated from geopolitical competition with China. The world is militarizing at a rapid pace, within NATO in particular. These countries are now desperately seeking to manufacture more weapons in more locations. Until recently, Brazil was considered a reliable place for this task, but thanks to its membership in BRICS, that is no longer the case. It certainly raises the question of whether Brazil might even, one day, be a target of military threats from NATO. I cannot rule this out.

At present, there is enough international dialogue to keep this off the table, but we also have an elite that works against our country. This weakens us in tougher negotiation processes, such as the one we are now facing with Trump’s tariffs. Within Brazil, there are those who play against us, and this makes it very difficult for us while facilitating their strategy of divide and conquer. Brazil is still considered, despite its strength, a banana republic, very susceptible to outside influence. With this degree of fragility in the international context, the fact that we have a mountain of wealth in critical minerals puts us in a position of great vulnerability. This is the dialogue I have been trying to have with the Presidency of the Republic. We need to create negotiating tables that treat territories as stakeholders, not as sacrificial zones. We cannot just be exporters of primary commodities, because technology will not necessarily be transferred here. It is an extremely complex production chain.

Lucas Braga: What is Brazil’s perspective on the relationship between public policy and geopolitics?

DT: We are in a very delicate situation as a country, and our elections are being closely monitored, with social media companies directly involved in the electoral process. So, how do we position ourselves?

We need to build negotiating tables where Brazil can get a little closer to China, because alone we are not strong enough. If, as a nation, we were more cohesive, we could also move forward with Mercosur, the common market for the South. Otherwise, we will remain a colony, allowing ourselves to be exploited from all sides.

Unfortunately, that is what I have seen so far. The National Bank for Economic and Social Development stance has been this: any company that wants to exploit us is welcome. But we could have a better approach. We could seek a gradual policy to reduce the export of raw lithium and rare earths and begin to stimulate industrialization processes within the country . On the other hand, from an environmental point of view, I don’t know what this represents. Would there be a reduction in the use of oil? No. Basically, an additional energy source is being added to boost the economy.

Arthur Hussne: What are the main things currently influencing mining companies exploring Brazilian rare earths?

DT: Time is a major factor. There is a feeling among the economic elite that if Brazil does not give the green light now, the country will miss the boat, and become weighed down by environmental concerns. The elite want to benefit from the new economic cycle rooted in rare earths, including the possibilities for military use and artificial intelligence.

Brazil’s Congress is absolutely opposed to any national interest. The structure that was built to give a very large slice of the budget to the Legislative Branch broke the government’s negotiating capacity because now congressmen don’t even want to take on a ministry. Today, a congressman receives millions of reais in amendments to maintain his base, so what interest would he have in getting involved with the executive branch, something that requires much more effort? There are congressmen here in the region who even have their own programs, such as “Mais Genética” (More Genetics), with amendment money. What interests the congressman is how much he can funnel toward his base in order to guarantee his election in the next cycle. So Brazil is very vulnerable.

In light of this, it might be that the best way forward is in getting closer to China, at least in regards to the critical minerals policy they have adopted, which abandons leaching and ammonium sulfate and includes strong environmental protection in relation to mining. Here, municipalities could at least form a rare earth consortium and only grant use and location to those who offer the best proposal, those who deliver more in terms of the production chain and environmental protection. But no one wants to work on this because mining is seen as a source of easy and quick money.

LB: What are the repercussions in terms of pollution from rare earth mining in Brazil and, more specifically, in Poços de Caldas?

DT: The impacts are enormous. Very soon we will have mineral pipelines for carrying materials to ports for export. A mineral pipeline uses enormous amounts of water, similar to what a city of 300,000 inhabitants uses. (Poços de Caldas has 200,000 people.) So this is a major problem.

Three million liters of water are already used monthly just for the washing process, which generates traces of heavy metals and cumulative radioactive material. Every day, 20,000 tons will be generated in Poços de Caldas and the same amount in Caldas. In terms of transport, we estimate 700 truck trips per day, in each of the cities, between a particular mine and a processing unit. And there is seasonal variation: at one time of year it rains a lot, which makes transportation impossible for several days; and in the dry season, it can inflate the number of trips up to 1,200, with dust that is impossible to control. And this dust will carry heavy metals, which have the potential to cause serious neurological damage to people living and working in the area. It is a material that has a much greater impact on the nervous system than pesticides. Our region is a volcanic area with a lot of water. We are the water tank of Rio Grande do Sul, and we are sent to Argentina. The transport of heavy metals will make it impossible to use this water, because there is no treatment to clean it of such metals.

LB: BRICS is considering creating commodity exchanges, including for grains. Could this be replicated for rare earths, given that the bloc would collectively have around 80 percent of the world’s reserves?

DT: I don’t know. The BRICS debate around rare earth mining is not happening publicly, largely because Trump is so volatile. I was surprised at the BRICS summit in Rio de Janeiro at how little was said about rare earth mining. We had a meeting with the Minister of Science and Technology, Luciana Santos, with the Minister of the Environment, Marina Silva, with the offices of the Ministries of Mines and Energy, Industry and Trade, and Finance. We said that it is necessary to establish some form of dialogue with the population, to seek technological alternatives, so that the population is an interested party in this process, but so far nothing has happened. There is R$ 45.8 billion in financing from the BNDES for the group of companies in the critical minerals sector, and no resources for the organization of the territories, for universities and researchers, and for the population to organize itself and know what is happening.

Caldas has an annual budget of R$ 70 million. These mining companies have forecast gross revenues of around R$ 6 billion per year. How can we have a negotiating table between the municipality and a company like this? We need the support of the federal government to set up a dialogue, and to think about building a rare-earth technology hub, which could innovate so as not to fall prey to “greenwashing.” That way, we can have some sovereignty, including with regard to the volume of minerals exploited and the kinds of technology we’d like to see transferred so that a national industry can start developing. Unfortunately, I currently see just the opposite: a huge rush to explore the region and prepare for mining on the one hand, and the passivity of the federal government—and even of BRICS—on the other.