President Luiz Inácio Lula da Silva signed into law on Wednesday (16) a bill creating the National Policy on Critical and Strategic Minerals, known in Brazil by the acronym PNMCE. Congress approved the text in early September. According to G1, the signing lands in the middle of a global race by governments and companies for access to minerals such as lithium, rare earths, nickel, graphite and copper.
The law authorizes a guarantee fund of up to R$ 5 billion to back projects in the sector and creates a tax credit of R$ 5 billion for companies that process and refine these minerals in Brazil. The federal government may join the fund, which is privately run, with a contribution capped at R$ 2 billion, and the fund cannot carry any public guarantee. According to the bill's rapporteur, the national development bank BNDES estimates that R$ 5 billion is needed to unblock the investments.
A law with geopolitical overtones
At the signing ceremony, Mines and Energy Minister Alexandre Silveira called the policy "a declaration of economic independence and of political courage by a nation that does not bow to external threats." According to G1, he did not name the United States. U.S. interest in Brazilian minerals is a recurring theme for President Donald Trump. Last month, the American company USA Rare Earth moved forward with the purchase of Serra Verde, Brazil's only operating rare earth mine, a deal criticized by sectors in Brazil. The U.S. Geological Survey ranks Brazil second in the world in rare earth reserves, about 21 million tonnes, behind only China.
"The great opportunity is not only in extraction. It lies especially in the capacity to install in Brazil the stages of processing, separation, refining, transformation and production of advanced materials, components and industrial products," Silveira said.
Brazil still ships much of these minerals abroad as raw commodities, without industrial processing, according to G1. Silveira said the budget of the National Mining Agency (ANM) for geological surveying will rise from R$ 8 million to R$ 300 million next year.
The law also creates a National Council for the Industrialization of Critical and Strategic Minerals, attached to the presidential palace. The council will draft the list of which minerals count as critical or strategic, to be revised every four years. It will also sign off, together with the ANM, on the sale of mining companies holding exploration rights and on foreign stakes in licensed miners.
The tax credit runs from 2030 to 2034, with an annual cap of R$ 1 billion, and grows as products climb the industrial chain, from concentrates to battery materials, electric motor magnets, fertilizers and energy storage systems. Only companies incorporated under Brazilian law, with headquarters and management in the country, qualify.
According to Silveira, the first company investments in refining and processing critical minerals in Brazil will be announced as soon as next week.