Brazil's Congress Clears Bill to Regulate Critical Minerals Sector

Brazil's Congress has approved a government-backed bill that establishes a national policy for critical and strategic minerals, setting the stage for a legal framework in a sector drawing increasing foreign interest.

The legislation, which now awaits presidential approval, creates a guarantee fund seeded with 2 billion reais (about $392.7 million) and offers 5 billion reais in tax credits spread over five years. A new federal council will be tasked with determining which minerals qualify as critical or strategic.

Supporters see the move as a way to capitalize on Brazil's vast mineral wealth. The country holds the world's second-largest reserves of rare earths, trailing only China, even though its current production remains modest. These minerals are essential for technologies ranging from renewable energy systems and electric vehicles to defense applications.

The abundance has attracted attention from nations like the United States and the European Union, which are seeking to reduce their reliance on Chinese supplies. The bill clarifies the legal definitions of key minerals, including nickel, lithium, and other rare earths.

However, critics have expressed concern that the proposed federal council could lead to excessive government intervention in the sector, potentially hindering its development. The bill was approved by the Senate after passing the lower house in May.