Unlocking Brazil’s Bauxite-Gallium Potential: BRE’s Strategic Shift with Rio Tinto

The agreement between Brazilian Rare Earths Limited (BRE) and Rio Tinto Brazil marks a pivotal moment in the global critical minerals landscape. By restructuring the financial terms of the Amargosa Bauxite Project, BRE has positioned itself to capitalize on surging demand for bauxite and gallium—a rare metal critical to semiconductors and renewable energy technologies. This strategic move not only reduces upfront costs but also aligns the company’s incentives with future production, setting the stage for a high-impact project in a supply-constrained market.

The Project’s Geological Strength

The Amargosa Bauxite Project, acquired from Rio Tinto in 2023, benefits from over a decade of exploration by the mining giant. Rio Tinto’s drilling program—spanning 56,919 meters across 4,257 holes—has identified robust bauxite zones with exceptional quality. Key metrics include 27.5 meters at 51.3% total available alumina, a purity level that minimizes impurities like reactive silica and iron. Such high-grade material is prized in aluminum production, where low contamination reduces processing costs and energy use.

Equally compelling is the gallium discovery at the Pelé Bauxite Project. Reassays of 1,275 historical samples revealed up to 190 ppm Ga₂O₃, with an average of 75 ppm Ga₂O₃. This places Amargosa among the world’s top undeveloped gallium prospects. Gallium’s role in semiconductors, solar panels, and LEDs makes it a linchpin for the clean energy transition, yet global supply remains concentrated in China. BRE’s discovery, if developed, could diversify this critical supply chain.

Financial Restructuring: Flexibility Meets Incentives

The revised agreement replaces a US$40 million milestone payment with a US$1.00 per wet tonne royalty on future bauxite sales. This shift alleviates BRE’s upfront financial burden, preserving capital for development. For context, if the project achieves 1 million tonnes per annum (Mtpa) production, the royalty would generate US$1 million annually—a manageable cost compared to the original lump-sum payment.

The move also aligns with industry trends toward royalty-based models, which reward project success while transferring early-stage risk. As suggests, the market has responded positively to the news, with shares rising 15% in the days following the April 14, 2025, announcement.

Gallium’s Strategic Importance

Gallium’s value lies in its irreplaceability. Its use in III-V compound semiconductors (e.g., gallium nitride, or GaN) is critical for 5G infrastructure and electric vehicle (EV) power systems. Meanwhile, solar-grade gallium arsenide (GaAs) cells offer higher efficiency than traditional silicon panels.

The gallium market is projected to grow at a 12% CAGR through 2030, driven by EV adoption and solar capacity expansion. However, supply constraints loom: global production remains static at ~300 metric tons annually, while demand could surpass 500 metric tons by 2030. BRE’s project, with its 75 ppm average grade, could fill this gap. At 1 Mtpa, it would produce 75 metric tons of gallium annually—roughly 25% of current global supply.

Market Dynamics and Geopolitical Risks

The Amargosa Project emerges amid heightened geopolitical tensions over critical minerals. Russia’s invasion of Ukraine and China’s dominance in rare earth processing have underscored the need for diversified supply chains. The U.S. Inflation Reduction Act and EU Critical Raw Materials Act have incentivized domestic production and partnerships with allies like Brazil.

Bauxite, the primary source of alumina, faces its own pressures. While global bauxite production hit 350 million tonnes in 2023, rising energy costs and environmental regulations are squeezing margins for inefficient producers. Amargosa’s low-impurity ore could command premium pricing in export markets, particularly as seaborne bauxite trade grows.

Development Momentum and Risks

BRE is advancing the project with RPM Global, targeting a JORC-compliant Mineral Resource Estimate and Scoping Study by mid-2026. These milestones will validate the project’s economics, including potential gallium co-production.

Risks remain, however. Permitting delays, commodity price volatility, and environmental scrutiny could impact timelines. The company’s debt levels and ability to secure financing for development will also be key. Additionally, while gallium prices have risen to US$800–1,000 per kilogram, they are volatile and tied to semiconductor demand cycles.

Conclusion: A Cornerstone in Critical Minerals

The Amargosa Bauxite-Gallium Project is more than a mine—it’s a strategic asset in a world racing to decarbonize and digitize. With high-grade bauxite, a top-tier gallium discovery, and a financial structure optimized for scalability, BRE is well-positioned to address critical shortages.

Consider these numbers:
- 75 ppm gallium grade at Amargosa vs. global average of ~40–50 ppm.
- 51.3% alumina content reduces processing costs by ~20% versus lower-grade ores.
- Gallium’s 12% CAGR demand vs. static supply growth.

For investors, the project offers exposure to two high-growth markets with minimal upfront dilution. As geopolitical risks tighten mineral supply chains, Amargosa’s potential to become a non-Chinese gallium source and a low-cost bauxite producer could make it a cornerstone of global critical mineral security. The April 2025 agreement is not just a financial reset—it’s a catalyst for Brazil’s emergence as a leader in the new minerals economy.