Brazil Critical Minerals Bill Gets Its Senate Vote in Pre-Election Week
BRAZIL · BUSINESS
Key Facts
—What happened: The Brazil critical minerals bill is one of five priorities Lula, Motta and Alcolumbre agreed to vote this week.
—The money: The bill carries about R$7 billion (US$1.35 billion) in incentives for processing minerals inside Brazil.
—Why it matters: Brazil holds the world’s second-largest rare-earth reserves but exports them mostly unprocessed.
—The catch: The bill gives a new state council power to vet foreign deals, which mining companies call legal insecurity.
—What comes next: The Senate should vote during the effort week ending 4 September; changes would send it back to the Chamber.
The Senate is set to vote the Brazil critical minerals bill this week, after President Lula and the heads of both chambers of Congress put it on the short list of five priorities for the last voting week before the October election.
The Brazil critical minerals bill goes from stalled to priority vote
The Brazil critical minerals bill, formally bill PL 2.780/2024, has travelled a slow road. The Chamber of Deputies approved it on 6 May, and it then waited in the Senate for almost four months.
That changed on 26 August at the Palácio da Alvorada. President Luiz Inácio Lula da Silva, Chamber Speaker Hugo Motta and Senate President Davi Alcolumbre agreed a five-bill agenda for the week of 31 August to 4 September.
The Brazil critical minerals bill made the list, alongside the end of the 6×1 work schedule and the blusinhas import-tax measure. Alcolumbre said the Senate will treat it with priority during the effort week.
We reported the Senate fast track and the choice of Senator Eduardo Braga as rapporteur last week. The link is at the end of this article.
What the R$7 billion actually buys
The bill creates a National Policy for Critical and Strategic Minerals. Its headline number, around R$7 billion (US$1.35 billion), splits into two instruments.
The first is a guarantee fund, the FGAM, with up to R$2 billion (US$386 million) from the federal budget. It does not lend directly; it guarantees loans for mining and processing projects.
The second is R$5 billion (US$965 million) in tax credits spread over five years, from 2030 to 2034. Only companies headquartered in Brazil that process the minerals domestically can claim them.
Mining companies would pay 0.5 percent of gross operating revenue into the fund. They can redirect that share to private research instead, under future regulation.
The bill also caps mineral research authorisations at a non-extendable ten years. The goal is to stop companies sitting on deposits without developing them.
The council with the veto pen
The most contested piece is the CIMCE, a national council for the industrialisation of critical minerals attached to the presidency. It decides which substances count as critical or strategic and reviews the list every four years.
The Chamber text also lets the council and the mining agency ANM vet changes of control, international partnerships and the sale of mining titles. That is where the industry pushes back.
The mining association Ibram says the powers widen state intervention in a capital-intensive, long-term business. It warns the ANM’s caseload could triple while the agency faces budget and staffing limits.
The government’s answer is sovereignty. Lula has framed the bill as the way to stop Brazil selling raw ore cheap and buying back batteries and magnets at a premium.
Why the world is watching
Brazil holds the second-largest rare-earth reserves on the planet, behind only China. Rare earths go into electric-car motors, wind turbines, chips and military equipment.
Today the country exports most of this wealth unprocessed. Vale’s chief executive Gustavo Pimenta calls critical minerals the “new oil” and warns Brazil is falling behind, as we reported on Saturday.
Demand signals are already strong. A joint call by state development bank BNDES and research agency Finep drew 124 proposals totalling R$85.2 billion (US$16.4 billion) in intended investment.
The agencies selected 56 plans worth R$45.8 billion (US$8.8 billion), ten of them in rare earths. The available funding, however, was capped at R$5 billion, a fraction of the appetite.
What to watch from here
The first checkpoint is the Senate floor vote on the Brazil critical minerals bill, expected during the effort week that ends on Friday 4 September. Rapporteur Braga’s text will show whether the Senate softens the council’s vetting powers.
If senators change the substance, the Brazil critical minerals bill returns to the Chamber. If they approve it as written, it goes to Lula for signature.
Watch also who shows up to claim the tax credits. The programme only pays for transformation inside Brazil, so the winners will be refineries and magnet plants, not ore exporters.
Frequently Asked Questions
What is the Brazil critical minerals bill?
Bill PL 2.780/2024 creates a national policy for critical and strategic minerals. It offers about R$7 billion (US$1.35 billion) in guarantees and tax credits for processing minerals inside Brazil.
When will the Senate vote on it?
The bill is one of five priorities for the voting week of 31 August to 4 September. Lula, Hugo Motta and Davi Alcolumbre agreed the agenda on 26 August.
Why do critical minerals matter to Brazil?
Brazil holds the world’s second-largest rare-earth reserves, behind China, but exports them mostly unprocessed. The bill tries to keep the refining value at home.
Why does the mining industry object?
The industry association Ibram says a new council’s power to vet foreign deals and ownership changes creates legal insecurity. It also warns the mining agency’s workload could triple.
What happens if the Senate changes the text?
The bill returns to the Chamber of Deputies for a new vote. If the Senate approves it unchanged, it goes to President Lula for signature.
Connected Coverage
We covered the fast track and rapporteur in Brazil’s Senate Puts the Critical Minerals Bill on Fast Track, the presidential pressure in Lula Presses Brazil’s Senate on the Critical Minerals Bill and the industry warning in Vale’s CEO Calls Critical Minerals the New Oil. The wider pact is in Brazil’s Decision Week in Congress, and Chile’s parallel move in Chile Signs a Strategic Minerals Pact.
Sources: Agência Senado, Câmara dos Deputados, DIAP, Brasil Mineral, Folha de S.Paulo, GESEL.
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