Brazil’s Lula Signs Law Creating National Policy on Critical Minerals and Rare Earths

President Luiz Inácio Lula da Silva signed into law, on September 16, Law 15,506/2026, which creates Brazil’s National Policy on Critical and Strategic Minerals (PNMCE) and a National Council for the Industrialization of Critical and Strategic Minerals (CIMCE), tied to the Presidency. The bill, originally Bill 2780/2024, had been approved by the Senate on September 2.

What the new law establishes

The legislation provides for up to R$ 7 billion (roughly $1.3 billion) in incentives to boost research, extraction, processing and transformation of critical and strategic minerals within the country, with part of the sector’s revenue earmarked for innovation and research. The central goal is to reduce Brazil’s reliance on exporting raw, unprocessed material and to encourage domestic processing, adding value to the production chain.

“Critical minerals become a backbone for other production chains, and any disruption or shortage can have significant, unwanted effects on other key national sectors,” said the bill’s Senate rapporteur, Eduardo Braga (MDB-AM). The new policy is designed to integrate with Nova Indústria Brasil, the federal government’s reindustrialization program.

Why rare earths matter

Among critical minerals, rare earths stand out: Brazil holds the world’s second-largest reserves of the group of 17 chemical elements, behind only China, according to the U.S. Geological Survey. These elements are essential for advanced electronics, wind turbine magnets, electric vehicles, high-performance batteries and defense equipment.

Despite the size of its reserves, Brazilian production remains at an early stage — around 1% of the global market, according to industry estimates. Brazil’s national development bank (BNDES) has already approved R$ 77.5 million for a rare earth processing project in Poços de Caldas (Minas Gerais state), one of the hubs expected to benefit from the new regulatory framework.

A geopolitical race

The new national policy arrives amid a global race for critical minerals, intensified by U.S. efforts to reduce reliance on supply chains controlled by China. American companies and others have been ramping up investment in Brazilian rare earth projects as part of that supplier-diversification strategy.