Breaking 70% China Dependency: Why the Korea-Brazil 'Strategic Partnership' Upgrade Is Reshaping Rare Earth Supply Chains

![Representative image unavailable: Official Blue House summit photos are inaccessible due to real-time press release access restrictions and copyright protection]

February 23, 2026, Blue House. The day Presidents Lee Jae-myung and Lula of Brazil shook hands, Korea redrew its rare earth supply chain map.

TL;DR

• Korea-Brazil elevate ties to 'Strategic Partnership' 67 years after diplomatic relations (first upgrade in 22 years since 2004)
• 10 MOUs signed: critical minerals, AI, health, security, etc. + 4-year action plan (2026-2029)
• Brazil: Holds world's largest rare earth reserves, expresses desire to attract Korean investment
• Korea: 70% rare earth import dependency on China → diversifying supply chain through Brazil
• Background: Intensifying competition for strategic minerals amid US-China hegemonic rivalry

📌 Facts: 'Mineral Diplomacy' at the Blue House

Brazilian President Luiz Inácio Lula da Silva, on a state visit to Korea from February 21-24, 2026, held a summit with President Lee Jae-myung on the 23rd.[1]

At the expanded meeting, President Lee stated, "We will expand cooperation across critical minerals, environment, space industry, culture, and SMEs," mentioning critical mineral cooperation first.[2]

President Lula's response was more specific.

"Brazil holds the world's largest rare earth reserves and has substantial nickel deposits. We want to attract investment from Korean companies in critical minerals."[3]

The two countries that day:

• Signed 10 Memoranda of Understanding (MOUs) (critical minerals, AI, health, security, trade-production integration agreements, etc.)
• Adopted a 4-year action plan (2026-2029, strategic partnership implementation framework)
• Agreed on the need to resume Korea-Mercosur (South American Common Market) FTA negotiations[4]

🔍 Driving Factors: Why Brazil, Why Now

1) The Risk of 70% China Dependency

Korea's rare earth imports are approximately 70% dependent on China. Rare earths are a group of 17 elements essential for electric vehicle motors, semiconductors, wind turbines, and missile guidance systems.

The problem is that as China strengthened rare earth export controls in 2024-2025, Korean companies directly experienced supply chain instability.

2) Brazil's 'Potential'

Brazil has:

• World's largest rare earth reserves (estimated)
• Nickel reserves in the world's top 3
• Latin America's largest economy + access to Mercosur market (including Argentina, Uruguay, Paraguay)

However, Brazil's rare earth industry has not realized its potential due to lack of mining and refining infrastructure. This is precisely where Korean capital and technology are needed.[5]

3) A 'Third Way' Amid US-China Hegemonic Competition

The US Inflation Reduction Act (IRA) and Europe's Critical Raw Materials Act (CRMA) provide subsidies and tax benefits to countries reducing dependency on Chinese rare earths.

If Korea partners with Brazil:

• Secures US-EU market access (non-China supply chain)
• Establishes foothold for Latin American market entry (momentum for Mercosur FTA negotiations)
• Gains Brazilian political support through technology transfer + local job creation

🌍 Context/Background: 67 Years of Friendship, First Upgrade in 22 Years

Korea and Brazil established a 'Comprehensive Cooperative Partnership' in 2004 under the Roh Moo-hyun administration, after diplomatic relations in 1959. This upgrade is the first in 22 years.

Background for the upgrade:

1. Stagnant trade volume: Bilateral trade is approximately $11 billion; while Brazil is Korea's largest Latin American trading partner, the scale itself is modest
2. Structural complementarity: Brazil (resources·agricultural products) + Korea (technology·manufacturing)
3. Political common ground: Both Lee Jae-myung and Lula are leaders from working-class backgrounds (child laborer·metalworkers' union president)

During this visit, Lula emphasized agricultural cooperation, stating "Brazilian beef pairs well with Korean bulgogi."[6]

📊 Outlook: Can Results Come in 5 Years for Rare Earths That Take 10 Years?

Short-term (1-2 years)

• Korean companies (POSCO, Samsung SDI, etc.) begin exploration and investment in Brazilian rare earth mines
• Activate high-level critical mineral cooperation channel (ministerial regular meetings)

Mid-term (3-5 years)

• Build local refining and processing facilities in Brazil (Korean technology transfer)
• Full-scale entry into Latin American market upon Mercosur FTA conclusion

Long-term (5-10 years)

• Target reducing rare earth China dependency from 70% to 40s%
• Develop Brazil as 'Latin American rare earth hub'

Risks:

• Brazilian political instability (2026 presidential election, policy continuity uncertainty after Lula)
• Environmental regulations (controversy over mining development near Amazon rainforest)
• Chinese pushback (Brazil-China trade volume is 10x Korea-Brazil)

✅ Checklist: 5 Things You Need to Know

📚 References

1. Reuters: South Korea and Brazil agree to expand cooperation in key minerals, trade (2026.2.23)
2. KED Global: S.Korea, Brazil to upgrade ties to strategic partnership with focus on rare earths (2026.2.23)
3. The Chosun Ilbo: President Lee "Expand critical mineral cooperation"... Lula "Hope for rare earth corporate investment" (2026.2.23)
4. Yonhap News: Korea-Brazil business circles discuss 3 major cooperation plans including advanced manufacturing and strategic minerals (2026.2.23)
5. Modern Diplomacy: Seoul, Brasília Elevate Ties with Strategic Minerals and Trade Pact (2026.2.23)

🖼️ Image Source

• Representative image unavailable: Official Blue House summit photos are pending official press release and protected by copyright. Will update when official images are released.