Concealed among the rolling hills that separate the city of Poços de Caldas in southeastern Brazil from its smaller neighbor, Caldas, is a defunct uranium mine.

Located on the rim of a 70-million-year-old volcanic crater, Poços de Caldas sits on promising deposits of the 17 chemical elements essential for 21st-century economies and warfare. They’ve become a point of focus for world powers, including President Donald Trump’s foreign policy interests, sparking a modern-day global “gold rush” for these critical minerals.

Brazil is home to the world’s second-largest rare earth reserves. It has the potential to become a major producer of these metals – and to offer the world an alternative to China, which currently dominates the supply chain. But it is keen to do so without repeating the extractive models of the past, which saw Brazil become a big exporter of raw materials and then lose out on the added value of processing them.

“Brazil can be the next hub of rare earths from the West,” says Marcelo De Carvalho, executive director in Brazil of Meteoric Resources, one of two Australian companies that have acquired mining rights around Poços de Caldas and hope to start producing large quantities of mixed rare earth carbonate – the technical term for the minerals extracted from the clay – within the next two to three years.

But Brazil also wants to develop its own downstream industry and the capacity to not just extract these strategic minerals, but also separate them and make them into magnets.

Earlier this year, Brazil launched South America’s first rare earth magnet plant, called CIT SENAI ITR. In June, the Brazilian development bank BNDES included 10 rare earth projects in a $920 million funding program to develop critical minerals production. Meteoric Resources and Viridis are among the selected firms, both with pilot plans to develop separation technology.