Brazil House Approves Critical Minerals Bill on Trump-Lula Eve
Brazil’s Lower House (Câmara dos Deputados) approved on May 6 the base text of PL 2780/2024 establishing the National Policy for Critical and Strategic Minerals (PNMCE), creating a R$5 billion (US$1.02 billion) tax-credit framework and a Mining Activity Guarantor Fund (FGAM) with R$2 billion in initial federal capital, and the bill now goes to the Senate.
The proposal, authored by Zé Silva (União-MG) with rapporteur Arnaldo Jardim (Cidadania-SP), came on the eve of President Lula’s May 7 White House meeting with President Donald Trump where critical minerals featured prominently.
Brazil holds approximately 21 million tons of mapped rare-earth reserves, the world’s second-largest behind China.
Key Points
— PL 2780/2024 approved May 6 by Câmara on virtual symbolic vote; now goes to Senate.
— FGAM fund: R$2 billion (US$407M) federal initial; up to R$5 billion (US$1.02B) with private capital.
— Tax credits up to R$5 billion (US$1.02B) starting 2030 via PFMCE program.
— Brazil rare-earth reserves: 21M tons (#2 globally); also #1 niobium, #2 graphite, #3 nickel.
— US Rare Earth bought Brazilian Serra Verde for US$2.8B on April 20.
The PNMCE Mechanics
The Rio Times, the Latin American financial news outlet, reports that the substitutive bill creates the PNMCE alongside a National Council for Critical and Strategic Minerals Industrialization, classifying critical minerals as those with supply-chain risk affecting transition energy, food security, and national security, while strategic minerals are those with significant Brazilian reserves essential for trade-balance surplus, technological development, or emissions reduction. Beyond the FGAM, the bill establishes the Federal Critical and Strategic Minerals Beneficiation and Transformation Program (PFMCE) granting up to R$5 billion (US$1.02B) in fiscal benefits from 2030, plus licensing priority and a five-year non-extendable research-authorization deadline. The text mandates ILO Convention 169-compliant prior consultation with affected indigenous and traditional communities.
Câmara President Hugo Motta (Republicanos-PB) said the topic is one “of global interest, like oil was for the development of important countries”, arguing technology cannot exist without rare-earth and critical-mineral exploitation. Rapporteur Arnaldo Jardim said the policy will establish Brazil as a major rare-earth oxide producer and stimulate “urban mining” through e-waste, battery, and end-of-life vehicle recycling. PT leader Pedro Uczai pushed for creation of a state-owned company (“Terrabras”) in the Petrobras model, but the bill stops short.
Strategic Reserves and US Buyer Race
Brazil ranks first globally in niobium reserves and production, second in graphite reserves, second in mapped rare-earth reserves at approximately 21 million tons, and third in nickel reserves, with only about 25% of national territory mapped. Despite holding roughly 10% of world critical-mineral reserves, Brazil contributes only 0.09% of global production according to a Deloitte/AYA report cited by Valor Econômico. The strategic gap is what the PNMCE seeks to address through processing, refining, and value-addition incentives, with Lula telling Trump on May 7 that Brazil “does not want to repeat what happened with silver in Latin America, with gold in Brazil, with iron ore that we send abroad”.
USA Rare Earth-Serra Verde Backdrop
The PNMCE approval lands two weeks after USA Rare Earth (Nasdaq: USAR) announced on April 20 a definitive agreement to acquire 100% of Serra Verde Group for approximately US$2.8 billion (US$300M cash plus 126.849M USAR shares), giving the US company control of the Pela Ema mine in Goiás, the only scaled producer of all four magnetic rare-earth elements outside Asia. Serra Verde is expected to deliver US$550-650M annualized run-rate EBITDA by end-2027, with a 15-year offtake agreement to a US-government-backed Special Purpose Vehicle including price floors for neodymium, praseodymium, dysprosium, and terbium. The deal closes Q3 2026 subject to regulatory approval, reflecting the Trump push to reduce dependence on China (90%+ of global rare-earth production).
PCdoB voted against the bill citing insufficient sovereignty safeguards, while the Brazilian Mining Association (Ibram) president Pablo Cesário welcomed the legislation as positive for industrialization. The Inesc think tank and UFJF professor Bruno Milanez warned that allowing FGAM resources for non-critical minerals could drain capital from genuine industrialization. The Brazilian Mining Municipalities Association (Amig Brasil), representing 63 cities, criticized the rushed timeline.
| Element | Detail |
|---|---|
| Bill | PL 2780/2024 (PNMCE) |
| Approved | May 6, 2026 (Câmara, virtual symbolic vote) |
| Author / Rapporteur | Zé Silva (União-MG) / Arnaldo Jardim (Cidadania-SP) |
| FGAM fund | R$2B federal + private = up to R$5B |
| PFMCE tax credits | Up to R$5B from 2030 |
| Rare-earth reserves | ~21M tons (#2 globally; China #1 ~44M) |
| Other rankings | #1 niobium, #2 graphite, #3 nickel |
| Mapped territory | ~25% of national territory |
| USA Rare Earth-Serra Verde | US$2.8B; closes Q3 2026 |
Connected Coverage
For broader US-Brazil tariff and supply-chain context, see our coverage of the Lula-Trump White House meeting and the 30-day tariff working group and our analysis of Tecnoglass Q1 record results despite the new 10% US tariff impact.
What Happens Next
- Senate review: PL 2780/2024 now under analysis; potential amendments expected.
- Q3 2026: USA Rare Earth-Serra Verde deal closes subject to regulatory approval.
- Watch: Lula-Trump 30-day tariff working group will likely include critical-minerals coordination.
Frequently Asked Questions
What is the PNMCE?
The PNMCE (Política Nacional de Minerais Críticos e Estratégicos) is Brazil’s National Policy for Critical and Strategic Minerals, established by PL 2780/2024 approved by the Lower House on May 6, 2026. The framework creates a R$2-5 billion FGAM mining-activity guarantor fund, up to R$5 billion in tax credits from 2030 via the PFMCE program, plus a National Council for Critical and Strategic Minerals Industrialization. Critical minerals are defined as those with supply-chain risk affecting transition energy, food security, and national security, while strategic minerals are those with significant Brazilian reserves essential for trade balance, technology, or emissions reduction.
Why does this matter for the US-Brazil agenda?
The May 6 approval came one day before the Lula-Trump White House meeting on May 7, where critical minerals featured prominently in the bilateral agenda alongside tariffs and organized crime. Brazil holds the world’s second-largest rare-earth reserves at approximately 21 million tons, and the US is racing to reduce dependence on China, which controls over 90% of global production. USA Rare Earth’s US$2.8 billion April 20 acquisition of Brazilian Serra Verde reinforced US strategic interest, with Lula informing Trump of the PNMCE approval during their meeting.
What does the FGAM fund do?
The Fundo Garantidor da Atividade Mineral (FGAM) is a guarantor fund supporting projects in critical and strategic minerals, with R$2 billion initial federal capital from the Union as a participating shareholder, complemented by private capital potentially reaching R$5 billion total. The fund finances new ventures across the mining value chain including extraction, beneficiation, processing, and industrialization, with priority licensing and a five-year non-extendable research-authorization deadline. PCdoB voted against the bill arguing it lacks sovereignty safeguards.
What are Brazil’s critical mineral reserves?
Brazil ranks first globally in niobium reserves and production, second in graphite reserves, second in mapped rare-earth reserves at approximately 21 million tons (behind China’s 44 million), and third in nickel reserves. Only about 25% of Brazilian territory has been geologically mapped to date, indicating substantial undiscovered potential. Despite holding roughly 10% of world critical-mineral reserves, Brazil currently contributes only 0.09% of global production, a structural gap the PNMCE seeks to close through processing and value-addition incentives.
Updated: 2026-05-08T07:30:00Z by Rio Times Editorial Desk
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