Refining the Whole Basket: Why Processing Hubs Are the New Geopolitics

In critical minerals, owning the mine is no longer the hard part. Owning

the refinery is. CSIS's 2025 analytical framework on processing hubs

argues that the next decade of critical-minerals geopolitics will be

decided less by who extracts the ore than by who processes it — and

Brazil is positioning to participate in that decision.¹

The Shift From Mining to Processing

Global critical-minerals strategy has shifted decisively from upstream

to midstream over the past five years. When the European Commission

first drafted the Critical Raw Materials Act, the mining-extraction

benchmark received most of the political attention. By the time the Act

was adopted in March 2024, the 40 percent processing benchmark emerged

as arguably the more consequential target.²

The reason is simple. Mining is geographically constrained by where

deposits sit. Processing can, in principle, be located anywhere the

chemical engineering, capital, workforce and regulatory framework allow

it. China has exploited that flexibility to build overwhelming global

market share in rare-earth separation (about 90 percent), sintered

permanent-magnet production (about 94 percent), graphite spheronisation

(roughly 90 percent) and battery-material precursor manufacturing.

Refining share is where concentration actually lives.

CSIS's 2025 Developing Rare Earth Processing Hubs framework articulated

this shift directly. The analysis argues that Western strategic policy

must treat refining capacity as the binding constraint, with specific

attention to the infrastructure, workforce, feedstock access and

regulatory frameworks that make a refining hub commercially successful.¹

CSIS Framework for Hubs

The CSIS framework identifies several characteristics of a successful

processing hub. Infrastructure is foundational — reliable power, water,

chemical feedstocks, industrial-grade waste handling, road and rail

connectivity to feedstock sources and downstream customers. Workforce is

similarly critical: refining operations require process chemists,

metallurgical engineers, instrumentation technicians and specialised

managers who cannot be trained overnight.

Feedstock access matters because processing facilities that cannot

secure reliable feed shut down quickly. A hub located far from mining

operations faces meaningful logistics cost and supply-risk challenges;

one co-located with or closely linked to upstream producers enjoys

structural cost advantages.

Regulatory frameworks complete the picture. Environmental permitting,

safety standards, labour regulations and taxation regimes all affect the

economics of processing. Hubs in jurisdictions with predictable,

well-administered frameworks — even if the frameworks are demanding —

outperform those in less predictable environments.

Chinese Dominance Reconsidered

Chinese processing dominance is rooted in deliberate industrial

strategy. Successive five-year plans, state-directed investment,

workforce development programmes, and policies that actively transferred

processing activity into China from partner countries built the current

position over three decades. Competing with that strategic depth

requires time, capital and patience that many Western countries have not

previously been willing to commit.

The 2025 shift is that commitment. MP Materials' 10X programme in the

United States, Lynas's integrated mine-to-magnet build, the Iluka

Eneabba refinery in Australia, the MP-Neo partnership in Estonia, and

the Brazilian Viridis-Ionic hub at Poços de Caldas all represent Western

responses to Chinese midstream dominance. Each is individually smaller

than any of several specific Chinese facilities, but together they begin

to build a non-Chinese refining ecosystem.

The arithmetic of catching up is daunting but not hopeless. Achieving

30-40 percent of Chinese refining capacity over a decade would represent

a historic industrial build-out in scale, but it is within the capital

and engineering capacity of allied economies if the political commitment

sustains.

Brazil's Three Potential Hubs

Brazil's critical-minerals geography points toward three potential

processing hubs. The first is Poços de Caldas in Minas Gerais, already

advancing as a rare-earth refining and recycling hub through the

Viridis-Ionic joint venture. The second is the Vale do Jequitinhonha

lithium corridor in Minas Gerais, where Sigma's upstream operations

could anchor downstream lithium hydroxide production. The third is the

Carajás-Pará complex, where Vale's nickel and copper operations create

the conditions for battery-grade nickel-sulfate and possibly cathode

precursor production.

Each of these potential hubs has specific characteristics. Poços de

Caldas has the industrial heritage and regulatory framework that

rare-earth processing needs. Jequitinhonha has the upstream anchor and

federal infrastructure attention. Carajás has Vale's scale, its existing

infrastructure, and the by-product gold, copper and potentially cobalt

streams that enrich a battery-material hub's economics.

If all three hubs progress as planned over 2026-2030, Brazilian

processing capacity could contribute meaningfully to the global

non-Chinese midstream. That outcome is not guaranteed but the

foundations are more solid than at any time in the country's industrial

history.

What Sets a Successful Hub

CSIS's analysis converges on a specific set of success factors.

Commercial success requires anchor customers who commit to multi-year

offtake at volumes that justify the capital investment. Technical

success requires expert engineering and steady operational execution.

Political success requires sustained government support across

administrations — not just one policy cycle.

Brazilian processing-hub candidates have uneven positioning across these

factors. Commercial anchors are in place for Poços de Caldas and

increasingly for Jequitinhonha; technical capability is developing;

political