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$8.4 billion rare earth deposit discovered in Brazil

Brazilian miner World Mineral Resources (WMR) has found a large reserve of neodymium, one of the 17 rare earth elements, in the western Bahia state (photo), which could bring US$8.4 billion to the country.

Local newspaper Nova Fronteira reports that this is first discovery of neodymium in the South American country, only comparable to the Chinese’s Baotu, the world’s largest deposit of this element.

WMR owner and CEO João Carlos Cavalcanti, one of the 20 richest men in Brazil, was quoted by IG News service as saying that his company has found concentration levels similar to those in China, grading 12.75%, whereas the Chinese has grades of 12-14%.

A geologist by training, Cavalcanti – who goes by J.C. – has been profiled in major media outlets not only for his wealth, but also for his eccentric ways. He never abandons his long grey-haired beard and in 2008, he told the New York Times that he meditates daily for three hours and draws strength from “the cosmos.”

Rare earth mineral deposits are difficult to find in quantities large enough to make it economically viable to mine, but the recently discovered deposit fits the bill. “The price of neodymium is now U.S. $300,000 a tonne,” said Cavalcanti “and we have 28 million tons of it,” he told IG.

The discovery will be formally announced later this month to national minerals production department (DNPM).

WMR holds 23.75% of Sul Americana Metais (SAM), along with Brazilian conglomerate Votorantim, which is developing an iron ore mine discovered by Cavalcanti in Minas Gerais state.

Cavalcanti is a former partner of compatriot tycoon Eike Batista, owner of the EBX group.

Giant Brazilian miner Vale (NYSE: VALE) and other companies are seeking to take a stake of China’s share of the REE market, which is worth an estimated US$5 billion a year.

In 2011 Vale identified rich REE reserves at its Salobo copper mine in Caraja, and expects to complete a feasibility study for the production of these minerals this year.

(Photo: WMR owner and CEO João Carlos Cavalcanti interviewed by Brazilian television)