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Brazil creates policy to boost production of critical minerals
“Mining requires intensive investment and production cycles that often span 40 years. Therefore, predictability and stability – especially fiscal stability – are vital to attracting long-term investment,” said Pablo Cesário of the Brazilian Mining Institute.
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The law establishes the Mineral Activity Guarantee Fund (FGAM) with a BRL 2 billion contribution from the federal government for projects and activities related to the production of critical and strategic minerals. The fund may only support projects deemed a priority under the policy.Brazil’s Minister of Mines and Energy Alexandre Silveira noted that the new law play a key role in helping Brazil gain a better understanding of its resources. “Brazil will gain in-depth knowledge of its resources and preserve its decision-making authority over its production chains,” he said.
The Geological Service of Brazil, he went on to say, will see its budget increase from BRL 8 million to BRL 300 million to fund soil research.
Sovereignty
After signing the bill, President Lula advocated for investment in training new professionals for a market that promises to expand. He invited universities and federal institutes to participate in developing new degree programs “so that we are not second to anyone in the world in terms of training.”
The president emphasized the importance of having a developed mining market, with industrialization and refining as well as production technology in Brazil. He then stated that there are “traitors to the nation” who wanted to sell critical minerals in their raw state to the US “for a song, just as they did with iron ore.”
“We will not allow history to repeat itself. Let Brazil’s enemies understand once and for all – our sovereignty is not for sale. Brazil’s wealth has only one owner – the Brazilian people.”
Critical minerals
Lula also signed the decree establishing the National Council for the Industrialization of Critical and Strategic Minerals. The council will be responsible for coordinating, planning, and monitoring national policy. Its role will be to propose public policies and actions aimed at developing production chains for critical and strategic minerals.
Critical minerals and rare earth elements are indispensable supplies for the technology, automotive, and defense industries, as well as for achieving the energy transition.
Critical minerals are those whose supply may involve various risks – geographic concentration of production, dependence on foreign sources, geopolitical instability, technological limitations, supply disruptions, and difficulty in finding substitutes.
Rare earth elements are a specific group of critical minerals. They consist of 17 chemical elements found scattered throughout nature, which makes them difficult to extract. They are essential for wind turbines, smartphones, electric cars, and defense systems.
With approximately 21 million metric tons, Brazil’s rare earth reserves are the second largest ever mapped in the world, trailing only China, which holds approximately 44 million metric tons. However, only about 25 percent of the country’s territory has been mapped, indicating enormous untapped potential.
The definition of which minerals are strategic or critical changes from country to country. The list may also change over time, depending on technological advances, geological discoveries, geopolitical shifts, and changes in demand. Rare earth elements, in turn, may also be considered critical or strategic minerals depending on the context.
