Brazil's Chamber of Deputies Passes Bill Aimed at Promoting Critical Minerals Investments

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Written by Amir Richani for IIR News Intelligence (Sugar Land, Texas)

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Summary

Brazil's lower house approved a bill aimed at attracting investment and developing domestic supply chains for critical and strategic minerals. The bill provides fiscal benefits for those who invest and operate in the country.

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Bill Supports Critical Minerals

On May 6, Brazil's lower house passed a bill to promote extraction, exploration, and supply chains for critical minerals. The bill offers fiscal incentives to companies developing assets and promoting local development in the country. It was passed by 343 deputies in favor and 97 against, and it will now be sent to the upper house for discussion.

For investors, the bill creates fiscal credits for companies established in Brazil that invest in mining operations and supply chains of critical and strategic minerals. These credits total 1 billion reais (about US$200 million) per year between 2030 and 3034, for a total of 5 billion reais (about US$1.01 billion) in fiscal reductions. Eligible credits could reach up to 20% of spending, with certain conditions.

Industrial Info Resources data finds nearly 700 active capital and maintenance mining projects valued at US$52.4 billion in Brazil.

The bill also creates a fund backed by contributions from companies and the state. The government could contribute up to 2 billion reais (US$400 million) to the fund.

The proposal aims to deepen Brazil's critical minerals supply chain beyond simply exploration and extraction. It sets parameters for research and development as well as local training programs.

Brazil's Minister of Energy and Mines Alexandre Silveira welcomed the Chamber's approval of the bill and vowed to work on the final approval of the law project.

"By transforming these resources into the axis of a state policy, Brazil, led by President Lula, signals that it does not intend to occupy only the role of exporter of raw materials, but also to expand its industrial and technological capacity. Brazil is sending a clear message: its natural resources must primarily serve the interests of the Brazilian people, the modernization of the economy, and the affirmation of national sovereignty in an increasingly competitive international scenario," stated Silveira.

Vast Natural Resources

Brazil hosts vast reserves of critical or strategic minerals, ranking in the world's top 10 reserves of lithium, nickel, niobium, vanadium, graphite, manganese and bauxite.

Meanwhile the country has attracted considerable attention to its rare earth reserves, the world's second largest after China. As an example, USA Rare Earth announced the acquisition of Serra Verde, owner of the Pela Ema rare-earth mine and processing plant in Goiás, for an implied equity value of about US$2.8 billion.

Brazil's Mining Role

International interest in Brazil as an alternative source of minerals is increasing, especially to diversify supply chains and reduce dependence on China. USA Rare Earth's Serra Verde agreement illustrates this trend.

Also, India signed a memorandum of understanding with Brazil on rare earths and critical minerals, while Brazil and Saudi Arabia signed a five-year agreement to expand cooperation in mineral resources, including investment, processing and value addition.

The critical mineral bill was approved by the lower house as Brazilian President Luiz Inacio Lula da Silva travelled to Washington to meet U.S. President Donald Trump on May 7. The meeting took place after recent tensions over tariffs between the nations, though more mining cooperation could have been among the key topics discussed by the presidents during the closed-door meetings.

Key Takeaways

• Brazil's lower house approves bill aimed at promoting investments in critical minerals.
• Companies could receive up to 1 billion reais (US$200 million) in fiscal benefits per year.
• Brazil contains significant resources of key minerals, including rare earths, graphite, niobium and others.

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About Industrial Info Resources
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, Industrial Info Resources is tracking over 250,000 current and future projects worth $30.2 trillion (USD).