Congress Approves Law Creating National Policy for Critical Minerals and Rare Earths

Senate Approves Bill 2,780/2024

Brazil’s Senate approved Bill 2,780/2024 on September 2, 2026, establishing a new national policy for critical minerals in the country. Thus, the text creates the National Policy on Critical and Strategic Minerals (PNMCE). Now, the proposal moves on to presidential sanction. The so-called “rare earths law” regulates the exploration of essential minerals. These minerals are used for the energy transition and for high-tech sectors. Therefore, the law covers rare earths, niobium, graphite, nickel, manganese, and lithium. To follow the bill’s complete legislative process, visit the Federal Senate’s portal.

Brazil leads reserves of critical minerals such as rare earths and niobium

Brazil holds the world’s second-largest reserve of rare earths. It also accounts for more than 80% of global niobium production. This production is concentrated mainly in the Araxá mine, in Minas Gerais. Furthermore, the new legislation distinguishes between two types of minerals. Critical minerals face the risk of global shortage or scarcity. Meanwhile, strategic minerals offer the country a comparative advantage, whether due to abundance or commercial relevance.

New mechanisms under the critical minerals law: Cimce and national registry

Among the main mechanisms, the law creates the National Council of the Critical and Strategic Minerals Industry (Cimce). This council will keep the classification of these minerals up to date. It also creates the National Registry of Critical and Strategic Mineral Projects (CNPMCE). Additionally, the text allocates R$2 billion in initial capitalization for the Mining Activity Guarantee Fund (Fgam). Finally, it also provides R$5 billion in federal tax credits over five years for processing and industrialization projects.

Requirements for companies and a response to China

The legislation requires companies to allocate 0.2% of gross operating revenue to mining funds. It also requires 0.3% for research and development initiatives. This percentage rises to 0.5% for innovation after six years. The stated goal is to allow foreign capital into the sector. However, the law prioritizes the participation of Brazilian companies in higher value-added stages, such as processing and beneficiation. Additionally, this priority represents a direct response to China’s current dominance in the extraction and refining of rare earths. For more news on Brazil’s political landscape, see more Politics posts.