Brazil just put more referees on the field for mining deals tied to critical minerals. The Senate's voice vote on Wednesday approved language that creates a special council with authority to sign off on shifts in control at mining companies, giving the state room to refuse future foreign takeovers it sees as misaligned with strategic aims. The House had already voted yes in May, and the package now awaits President Luiz Inácio Lula da Silva's signature.
Lula championed the push as a sovereignty play, arguing Brazil should keep more of the value chain at home rather than shipping out raw materials.
To steer activity into domestic processing, the bill sets aside 5 billion reais (about $1 billion) in tax credits for Brazil‑headquartered companies that invest in processing and other value‑adding steps inside the country. It also creates a mining guarantee facility backed with 2 billion reais from the federal budget to support projects involving critical and strategic minerals.
The plan tells the mining regulator to move areas with potential for critical and strategic minerals to the front of the auction line. And it limits exploration authorizations in such zones to a single, non‑extendable 10‑year term.
Lula put the stakes in plain language in a TV ad this week: "There are people abroad eyeing our resources, and there are people here at home ready to hand everything over to them on a silver platter," he said. "Rare earths are the gold of the 21st century. But this time, we are not going to export rocks only to buy back technology later."
His conservative rival, Flávio Bolsonaro, is preparing to take on Lula in Brazil's October presidential election and is promoting Brazil as a solution to US demand for critical minerals. In an electoral court filing, his campaign said he intends to work "to attract foreign capital and technology that already exist around the world, applying in Brazil what other countries have already mastered and transferring that knowledge to the country."
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Industry groups wanted a lighter touch. Private‑sector backers had thrown support behind a Senate alternative that would have limited the council to simply recording and watching ownership changes or contracts tied to future output. Junior miners represented by the Critical Minerals Association (AMC) pressed for clear rules on which deals require approval, how decisions are made, deadlines, and the council's remit.
Implementation will determine how heavy the new hand feels. Pablo Cesário, acting president of mining lobby Ibram, called the passage "an important milestone," but said the details matter, including thresholds for which deals get flagged and how sovereignty and market‑concentration risks are assessed. "Brazil will remain open to foreign investment. We will work to ensure predictability for investors and businesses," he said, adding, "The goal shouldn't be to subject most mining deals to government review."
Brazil is Latin America's biggest economy and sits on the world's second‑largest rare‑earth stash after China, plus big deposits of other inputs used in smartphones, electric vehicles, and military drones. Washington has been eyeing those resources as it tries to loosen China's grip on key supply chains. That backdrop helps explain both the incentives and the new gatekeeping.
One recent example in the spotlight: in April, Oklahoma‑based USA Rare Earth Inc. struck a deal to acquire Serra Verde Group, which owns Brazil's only operating rare earths mine. Deals like that will now be judged against the council's criteria once the system is up and running. For anyone with exposure to battery metals, defense tech, or EV supply chains, Brazil's mix of carrots and permissions could shape where projects land and how fast they move.