Brazil Senate Approves Critical Minerals Law with Subsidies and Foreign Investment Veto

The Brazilian Senate approved a legal framework for the exploration of critical minerals and rare earths on Wednesday. The legislation provides 5 billion reais in tax incentives and establishes a government council with the power to veto international partnerships and changes in corporate control. The bill passed without significant changes to the text previously approved by the Chamber of Deputies and now moves to the president for sanction.

The law creates the National Council for the Industrialization of Critical and Strategic Minerals to regulate the sector. This body will oversee the granting of mining titles and the transfer of Union assets. While the National Mining Agency (ANM) may conduct auctions to boost growth, the new council will maintain scrutiny over foreign influence. The 5 billion reais in subsidies, provided as CSLL credits between 2030 and 2034, will prioritize companies that use local labor and sell to the domestic market.

President Luiz Inácio Lula da Silva pushed for the bill as a priority to ensure national sovereignty and promote the domestic refining of minerals. This move comes as the United States government has shown increased interest in the sector, including a 750 million dollar investment by the U.S. Department of Defense in Serra Verde, a company based in Goias. The U.S. interest is viewed as an effort to counter China, which currently leads the world in critical mineral exploration.

Center leaning sources frame the event differently. One emphasizes the political victory for President Lula and the strategic goal of national sovereignty against foreign influence. Another focuses on the tension between government scrutiny and industry warnings that the new rules could deter foreign investment.