Brazil wants access to the U.S. Inflationary Reduction Act (IRA), a Biden administration package that provides billions in subsidies and tax breaks for energy transition projects.

For example, if an IRA subsidizes a battery factory in a particular US state, a company that opens a plant in Brazil to supply inputs for batteries will benefit from tax incentives.

But today, only countries with trade agreements with the United States can benefit from some of these concessions, except for Japan, which has received specific concessions. The United Kingdom and the European Union are negotiating similar recognition. U.S. officials say it’s difficult for the U.S. Congress to approve sanctions for other countries, but there are other provisions of the IRA that benefit Brazil.

The Americans also want Brazil to join the Global Partnership for Investment and Infrastructure (PGII), the US and G7’s response to China’s Belt and Road Initiative, which funds infrastructure projects around the world.

But the Brazilian government is currently considering whether to cap Chinese President Xi Jinping’s state visit with Brazil’s entry into the Belt and Road Initiative. The visit will be on November 20, after the G20 summit in November.

Since Lula’s visit to China in April 2023, Xi has been pushing for Brazil’s entry. But the Brazilian government is not putting down the hammer just yet, believing that with Chinese investments already coming in, there are not many advantages to formally entering the venture. Country.

The deal with the US is to be discussed by Energy Secretary Jennifer Granholm during a meeting of the G20 Energy Transition Working Group in Foz do Iguaçu in early October. Washington wants Brazil to participate in the Mineral Security Partnership, an initiative with 13 mineral-importing countries, as a way to boost investments, according to the US.

In July, Assistant Secretary Piatt spoke on the IRA and Minas Gerais in Brasilia, where lithium reserves were discovered in the Jequitinho Valley, sparking a wave of investments from companies such as Sigma Lithium and Atlas Lithium. In the Poços de Caldas region, the discovery of rare earths generated investment by Meteoric.

The attack was part of the US strategy of “friendship additions” – shifting the supply of key minerals to allies. Today, China accounts for 60% of global production and 90% of rare earth exports, producing 77% of graphite, 88% of refined magnesium, 98% of gallium, 67% of titanium and 81% of tungsten.

The Democratic Republic of Congo accounts for 70% of cobalt production and most of the companies exploring the mineral in the country are Chinese.

According to a study by the US Geological Survey, the US is directly dependent on China for 8 important minerals: antimony, arsenic, bismuth, graphite, rare earths, tantalum, tungsten and yttrium.

In response to US sanctions limiting China’s access to advanced chips needed to train artificial intelligence, Beijing has restricted its exports of rare earths and, in December 2023, banned sales of processing technology for these inputs.

Brazil produces 90% of the world’s niobium and holds 94% of the world’s reserves, 22.5% of graphite reserves, 16% of rare earths (the world’s third largest) and 16% of nickel.

In a statement, the Institute for Strategic and International Studies, which created a section devoted to the topic, says that “the United States cannot maintain its leadership in national security and energy without reducing its dependence on foreign adversaries. The government must forge critical mineral supplies” and “new geopolitical alliances with resource-rich countries in the Global South.” அழைப்பு விடுக்கிறது.

“There is certainly competition for the resources needed to drive the energy transition. China is ahead of the United States in identifying the strategic importance of this energy transition sector, but we are catching up,” Piatt says. sheet The month of July.