India and Brazil Strengthen Mining Cooperation to Counter China

Brazil and India signed an agreement to expand cooperation on critical minerals and rare earths, aiming to diversify supply chains amid China’s dominant position in refining and production. The deal affects sectors including renewable energy, electric vehicles, semiconductors, and defense, with Brazil supplying resources such as iron ore, rare earths, and other strategic minerals to support India’s industrial and infrastructure growth. 

Brazil and India have signed an agreement to expand cooperation on critical minerals and rare earths as part of a broader global push to reduce reliance on China. The deal, announced during Brazilian President Luiz Inacio Lula da Silva’s visit to New Delhi, aims to secure supply chains for key technologies, amid growing concerns over China’s dominance. 

On Feb. 21, Lula da Silva met Indian Prime Minister Narendra Modi in New Delhi to discuss trade and investment opportunities. Modi described the agreement as a “major step towards building resilient supply chains.”

Brazil, the world’s second-largest holder of critical minerals after China, supplies resources used in electric vehicles, solar panels, smartphones, jet engines, and guided missiles. “Increasing investments and cooperation in matters of renewable energies and critical minerals is at the core of the pioneering agreement that we have signed today,” Lula said.

Although few details of the mineral deal have been released, demand for Brazilian iron ore has risen in India amid rapid infrastructure expansion and industrial growth. Rishabh Jain, Expert with the New Delhi-based Council on Energy, Environment and Water think tank,said that India’s engagement with Brazil follows recent supply chain agreements with the United States, France, and the European Union.

“Global South alliances are critical for securing diversified, on-ground resource access and shaping emerging rules of global trade,” Jain said.

Alongside the critical minerals deal, India’s Foreign Ministry said nine other agreements were signed, including a memorandum of understanding covering digital cooperation and health. Modi called Brazil India’s “largest trading partner in Latin America” and said, “We are committed to taking our bilateral trade beyond US$20 billion in the coming five years.”

“Our trade is not just a figure, but a reflection of trust. When India and Brazil work together, the voice of (the) Global South becomes stronger and more confident,” Modi added.

China’s Dominance in Critical Minerals and Strategic Risks

China’s dominance in critical minerals poses significant strategic risks for global industries reliant on energy technologies, advanced manufacturing, defense, and high-tech sectors. 

According to the International Energy Agency’s 2025 Global Critical Minerals Outlook, China controls the refining of 19 of 20 key minerals, averaging 70% of the global market, and holds 91% of rare earth refining capacity. Its share of permanent magnet production, essential for electric vehicles, wind turbines, industrial motors, defense systems, and data centers, has grown from 50% two decades ago to 94% today. This concentration creates vulnerabilities to geopolitical tensions, trade disruptions, and supply shocks.

China’s export controls have further amplified these risks. In April 2025, Beijing restricted exports of seven heavy rare earths and related products, causing shortages for US and European manufacturers and driving European prices up to six times domestic levels. 

By October, restrictions extended to foreign-made products containing Chinese-sourced rare earths, additional elements including holmium, erbium, and ytterbium, and critical processing equipment. These measures threaten production across sectors such as defense, aerospace, semiconductors, industrial motors, AI, and data centers.

Lithium-ion battery supply chains are similarly concentrated, with China controlling 80–95% of midstream and downstream production. Any tightening of export restrictions could increase costs for electric vehicles and energy storage while exposing strategic sectors to supply interruptions.

Efforts to diversify sources face structural challenges. Mining, refining, and permanent magnet production outside China remain limited, with new projects often requiring eight years or more to reach commercial scale.

Global Push Strengthens Critical Minerals Supply Chains

Several countries are expanding cooperation on critical minerals and rare earths to reduce dependence on China and secure supply chains essential for industry, technology, and defense.

In early 2026, the United States intensified its strategy to counter China’s dominance, shifting from market competition to an alliance-based approach designed to protect allied industries from supply shocks and predatory pricing. 

The cornerstone of this effort was the Inaugural Critical Minerals Ministerial on Feb. 4, 2026, which brought together 55 nations to establish a preferential trade zone for strategic materials. The initiative includes price supports, standards, subsidies, and guaranteed offtake, with Mexico among the participating countries. 

Some initiatives aim to diversify global supply chains. For example,  Brazil, holding the world’s second-largest rare earth reserves at an estimated 21 million tons, has received nearly US$500 million in financing from the US International Development Finance Corporation for Serra Verde, the country’s only active rare earth producer. Lula da Silva and Trump have emphasized the strategic potential of these resources to strengthen defense and technological capabilities. 

Similarly, Mexico, holding the 2026 pro tempore presidency of the Pacific Alliance, is focusing on industrializing critical minerals to strengthen regional supply chains, high-value manufacturing, semiconductors, and advanced batteries. 

Economy Minister Marcelo Ebrard said Mexico is seeking access to 13 minerals it lacks or produces in limited quantities, including lithium, aluminum, cobalt, nickel, and vanadium, while remaining a top global producer of antimony, barite, copper, fluorite, graphite, lead, silver, and zinc. Mexico will raise critical minerals trade at the WTO’s XIV Ministerial Conference in March 2026 and is engaging with Latin America, Ibero-America, India, and Canada to secure supply.