Critical minerals in Brazil: why reserves alone are not enough to lead the new economy

Legal status first: approved by Congress, not yet law

Brazil's Senate approved Bill 2,780/2024 on 2 September 2026. The final text was sent for presidential assent on 4 September and, when checked on 9 September, remained within the official assent-or-veto period. The accurate formulation is that Congress approved a bill to establish the National Policy for Critical and Strategic Minerals, known as PNMCE; the policy should not yet be described as law in force.

That distinction matters because assent, vetoes and later regulations may change provisions and implementation. Every fund, tax incentive and corporate obligation discussed below is a provision of the approved bill, not a benefit already available or a duty currently enforceable.

The bill is the news; the value chain is the real story

Ore in the ground is not a productive chain. Between a geological occurrence and a battery, permanent magnet, electric motor or server lie exploration, mine planning, beneficiation, separation, refining, materials chemistry, manufacturing, quality control, logistics and proprietary knowledge.

Reserves are geological; strategic autonomy is industrial and technological. A country may export large volumes of concentrate and still depend on foreign reagents, equipment, refined products, patents, components and customers. The decisive question is not merely how much geology exists, but which steps can be performed competitively, safely and responsibly.

What makes a mineral critical or strategic

Critical does not mean rare. A mineral becomes critical when economic importance meets supply vulnerability: import dependence, geographic concentration, trade restrictions, insufficient domestic capacity or technological bottlenecks. Brazil's National Mining Agency notes that national lists differ because economies have different needs; potash, for example, is particularly important to Brazilian agriculture.

The approved bill distinguishes critical minerals from strategic ones. Criticality centres on supply risk for key sectors. Strategic status reflects reserves and economic, technological, regional, trade or decarbonisation importance. The categories overlap, but they are not universal or interchangeable.

Rare earths: the name can mislead

Rare earths are a group of 17 elements. Many are not exceptionally scarce in the Earth's crust. The difficulty is finding deposits that can be developed economically and separating chemically similar elements at industrial quality while controlling environmental impacts.

Neodymium, praseodymium, dysprosium and terbium are important to certain high-performance permanent magnets. That does not make every rare-earth occurrence a reserve, nor every element equivalent. A geologically abundant material may still be critical when processing is concentrated or substitution is difficult.

From the mine to the data centre

Lithium is used in batteries; graphite in many anodes; nickel, cobalt and manganese in specific cathode chemistries. Not every electric vehicle uses nickel or cobalt: LFP batteries materially change that exposure. Copper enables grids, motors, electrification and data centres. Niobium strengthens microalloyed steels and special alloys, while gallium, germanium and other materials support semiconductors, telecommunications and optics.

Artificial intelligence has a physical supply chain. Servers, storage, networks, cooling, generation and transmission require materials and equipment. The cloud depends on minerals before it depends on software. This is not a claim that one mineral powers AI; it is a reminder that digital expansion creates industrial and energy demand, as explored in our article on the physical risks and engineering of AI data centres.

Where value and dependency accumulate

The chain runs from resources to exploration, mining, beneficiation, separation and refining, compounds and alloys, advanced materials, components and final systems, followed by recovery and recycling. Upstream expertise does not automatically create midstream or downstream capacity.

The International Energy Agency reports that processing remains more concentrated than mining for several materials. In specific 2026 outlook datasets, the leading supplier accounts for more than 90% of refining for graphite, manganese and rare earths. Those figures are mineral- and year-specific, not a universal statistic. They show why opening another mine solves only part of supply security.

Brazil's position without inflated rankings

Brazil's Ministry of Mines and Energy highlights lithium, nickel, copper, graphite, rare earths, niobium, manganese and bauxite among national opportunities. This does not support a single global ranking for “critical-mineral wealth”: resources, reserves, grades, production and market conditions are different measures.

Niobium is the clearest established case. The US Geological Survey estimates that Brazil supplied about 93% of world production in 2025. This leadership is substantial but does not prove control over every high-value application. Commercial rare-earth production at Minaçu, Goiás, likewise raises the next question: how much separation, metalmaking, magnet production and component manufacturing can be developed locally?

What the approved Bill 2,780/2024 would create

If assented to, the text establishes PNMCE and a National Council for Industrialisation of Critical and Strategic Minerals linked to the Presidency. It sets principles involving value addition, sovereignty, legal certainty, sustainability, innovation and regional development, with a project registry, a voluntary low-carbon certificate, research networks and financial and regulatory instruments.

Article 8 seeks to encourage beneficiation, transformation and industrialisation in Brazil and to prioritise projects that internalise value-chain stages. It does not simply ban raw-mineral exports. The actual effect will depend on the final enacted text and implementing rules.

Guarantees, R&D and tax credits remain proposals

Article 9 authorises the federal government to create and capitalise a Mineral Activity Guarantee Fund, FGAM, up to BRL 2 billion. The fund would have its own private assets and provide guarantees to qualifying activities. It does not exist merely because Congress approved the bill.

Article 15 provides for regulated investment by companies. For six years after regulation, the approved text sets minimum allocations of 0.3% of gross operating revenue to chain-related R&D and innovation and 0.2% to FGAM quotas; later, the R&D minimum would be 0.5%. These are not current obligations.

The proposed federal processing programme, PFMCE, covers mineral transformation and urban mining. It allows a regulated, competitive tax credit through 2034, potentially up to 20% of eligible spending, with a BRL 1 billion annual cap between 2030 and 2034. No company has an automatic 20% entitlement.

Urban mining, low carbon and traceability

The bill defines urban mining as recovering valuable materials from electronics, batteries, end-of-life vehicles, construction waste and landfills. Recycling can diversify supply and reduce primary extraction, but it requires collection, safe logistics, dismantling, scale, traceability and suitable recovery technology.

The proposed Low-Carbon Mineral Certificate would be voluntary and based on emissions intensity and lifecycle assessment, with international interoperability. Credibility will depend on system boundaries, comparable data and verification. It would not make every Brazilian mineral low-carbon by declaration.

Strategic minerals do not justify strategic risks

Mining and processing use water and energy and create occupational exposure, chemical hazards, waste rock, tailings, transport, biodiversity, community and closure challenges. A mineral's role in energy transition does not make it environmentally neutral. Administrative priority is not an automatic environmental licence.

The approved text itself refers to leading practices for dam and waste-stockpile safety when projects are prioritised. PNMCE would not replace environmental law, mining-safety rules or occupational risk management. Criticality should increase the quality of engineering and governance, not lower the threshold for acceptable risk.

A practical strategy for capturing more value

Brazil needs to identify chain stages where geology, power, technology, infrastructure, skills and customers can form durable advantages. Full autarky is neither realistic nor always desirable; diversified suppliers and reliable partnerships are also resilience. But routinely exporting concentrate and importing advanced materials limits domestic value and learning.

Processing plants require stable feed, process control, reagents, energy, water, waste treatment, qualified people and buyers. Industrial policy must connect laboratories to demonstration plants and manufacturing. Projects also need credible community engagement, benefit sharing and closure plans from the outset.

The debate starts underground but does not end at the mine. Brazil has a strategic window; converting it into capability without compromising safety or environmental responsibility is the harder task. Reserves are geological. Sovereignty is built along the chain.