Brazilian Rare Earths Forges Dual-Commodity Path with Bauxite Boom and Strategic Rare Earths Pact

SYDNEY – January 29, 2026 – Brazilian Rare Earths (ASX: BRE) has signaled a dramatic acceleration of its strategic ambitions, unveiling a highly profitable development path for a massive bauxite project alongside a landmark deal to supply critical heavy rare earths to a European partner. The company's latest quarterly report details a two-pronged strategy that positions it not just as a rare earths developer, but as an emerging, diversified critical minerals powerhouse.

Anchoring this new phase of growth is a compelling Scoping Study for its Amargosa Bauxite-Gallium Project in Bahia, Brazil, and a binding offtake agreement with French processing specialist Carester. Bolstered by a formidable A$162.4 million cash position, BRE is aggressively moving to unlock the value of its vast Brazilian holdings and establish a significant new supply chain for minerals essential to the global economy.

The Bauxite Powerhouse Emerges

While its name highlights a focus on rare earths, Brazilian Rare Earths has revealed a project of immense scale and profitability in a completely different commodity: bauxite, the primary ore for aluminum. The recently completed Scoping Study for the Amargosa project paints a picture of a large-scale, low-cost, and rapidly achievable mining operation.

The study projects an average annual EBITDA of US$102 million and free cash flow of US$84 million over an initial 17-year mine life. With an after-tax net present value (NPV8) of US$630 million and a remarkably short payback period of just 1.2 years, the project's economics are robust. These figures are based on a simple, low-capital plan to mine and export 5 million tonnes per annum of Direct-Ship-Bauxite (DSB) using efficient road logistics to an established port.

Underpinning this plan is a colossal JORC Mineral Resource Estimate of 568 million tonnes, which includes a high-grade component of 98 million tonnes of DSB. Independent analysis by CM Group has placed Amargosa in the first quartile of the global seaborne bauxite cost curve, confirming its potential to be one of the world's most cost-competitive suppliers. The study also identified strategic concentrations of gallium—a critical component in semiconductors—within the deposit, offering a potential future byproduct that could further enhance value and address another key global supply chain vulnerability.

To maximize shareholder value, BRE is advancing plans for a de-merger of the Amargosa project. The company has already lodged suitability-for-listing materials with the ASX, targeting a spin-out in mid-2026. This move would create a separate, pure-play bauxite company, allowing investors to directly value the asset while enabling BRE to maintain its core focus on developing its rare earth deposits.

Securing the Future: A Critical Minerals Lifeline to Europe

Simultaneously, BRE has taken a major step in its primary mission by forging a strategic alliance with Carester, a leading French rare earth processing firm. The partnership includes a binding 10-year offtake agreement for BRE to supply heavy rare earth concentrate to Carester. This deal is crucial for securing the downstream market for BRE's future production and provides a clear pathway to revenue.

The agreement will support the production of approximately 150 tonnes per year of separated dysprosium (Dy) and terbium (Tb) oxides. These heavy rare earths are indispensable for the high-performance permanent magnets used in electric vehicle motors, wind turbines, and advanced defense systems. With global supply chains for these elements heavily concentrated, this Brazil-to-France corridor represents a significant step in building resilient, alternative sources for Western industries.

Beyond the offtake, the partnership is a technical collaboration. Carester will provide engineering and commissioning support for BRE's own planned rare earth separation refinery at the Camaçari Petrochemical Complex in Bahia. This move signals BRE's long-term ambition to move up the value chain, capturing more value by producing separated oxides in Brazil rather than just exporting concentrate. It aligns perfectly with Brazil's national strategy to become a key player in the critical minerals sector, supported by initiatives like the EU-Mercosur agreement aimed at strengthening raw material cooperation.

Execution, Funding, and Favorable Headwinds

BRE’s ambitious dual-track strategy is underpinned by strong execution and a fortified balance sheet. The company ended the December 2025 quarter with A$162.4 million in cash, significantly boosted by a A$120 million placement completed in October. This financial strength provides the necessary runway to fast-track development at Amargosa and its rare earth projects.

The market has responded positively to the company's clear and aggressive strategy. BRE's share price saw a notable 8% jump following the release of the Amargosa study, reflecting investor confidence in the project's economics. Analyst sentiment has been favorable, noting the de-risking effect of the Carester partnership and the value-unlock potential of the Amargosa spin-out.

Further strengthening its corporate capabilities, BRE appointed John Vander Ploeg as its new Chief Financial Officer. With over 20 years of experience in listed-company reporting and complex corporate transactions, his appointment is a key step in preparing the company for its next phase of development and, potentially, the Amargosa de-merger.

Operating in Bahia, Brazil, also provides distinct jurisdictional advantages. The state offers competitive taxes, access to skilled labor, and established infrastructure. Critically, the government is actively working to streamline permitting for strategic projects. While Brazil's environmental licensing process can be lengthy, with timelines for major projects sometimes stretching from 5 to 10 years, there is a clear trend toward acceleration. BRE itself is targeting a 2029 production start for its Monte Alto rare earth project, having begun the licensing process in 2025. This precedent lends credibility to the company's projected 2-3 year permitting pathway for the Amargosa project, which could see development commence by 2028, pending all necessary approvals.