Brazil attractive for its cheap labour, clean energy
Western governments offer incentives
Price slump, technical challenges hinder growth

MELBOURNERIO DE JANEIRO, June 17 Reuters Mining giant Brazil has big ambitions to build a rare earths industry as Western economies push to secure the metals needed for magnets used in green energy and defence and break China39;s dominance of the supply chain.

Working to its advantage are low labour costs, clean energy, established regulations and proximity to end markets, including Latin America39;s first magnet plant which would provide a ready buyer for the metals.

But low rare earths prices, technical challenges and nervous lenders pose challenges to the Latin American nation39;s hopes to propel itself into the world39;s top five rare earths producers.

The pace at which Brazil39;s rare earths projects come together will be a test for how successful the West may be at building a new advanced industry almost from scratch to break China39;s grip.

Brazil holds the world39;s thirdlargest rare earth reserves. The country39;s first rare earths mine, Serra Verde, started commercial production this year.

Output is set to grow, analysts, mining CEOs and investors say, supported by Western government incentives that are also accelerating a global rare earths refining and processing industry.

Brazil as a source of potential rare earths is a very exciting proposition because there have been some very meaningful discoveries made in the…