Brasilia - With strong support from the government — and even from part of the PT (Workers' Party) — for the idea of an executive-controlled council to oversee the activities of mining companies (mainly foreign ones) in the production and exploration of critical minerals in Brazil, the bill regulating the activity in the country was approved on Wednesday night, May 6, in the Chamber of Deputies.

Just as important as the creation of this "super-council" was the coordination in the National Congress for the bill to also be approved in the Senate, by President Davi Alcolumbre (União-AP), the biggest adversary of the Planalto Palace at this moment.

“President Davi [Alcolumbre], through President Hugo [Motta], followed the process and yesterday at the event in the Chamber, in conversation with us, wished the project good luck and said that he will treat it with priority and expedite it there,” said Arnaldo Jardim (Cidadania-SP), rapporteur of the critical minerals bill in the Chamber, to NeoFeed .

"The project didn't end up looking like something the government wanted; I think we broadened its scope, and it has a good chance of moving forward in the Senate," he added.

Even before the vote that approved the bill in the Chamber's plenary session, Alcolumbre had already committed to expediting the proposal's progress among the senators. During a ceremony commemorating the Chamber's 200th anniversary, the president of the House, Hugo Motta (Republicanos-PB), discussed the matter with the president of the Senate.

Jardim believes that the proposal will not be tainted by the political battle involving Alcolumbre and President Luiz Inácio Lula da Silva (PT), after the Senate president acted to ensure that the Senate defeated the PT's nominee to the Supreme Federal Court (STF), Jorge Messias.

Despite the government's clear interest, the issue has taken on the air of a matter of state policy, detached from the current political turmoil in Brasília, and will even be one of the topics of Lula's meeting with the President of the United States, Donald Trump, today. The new Brazilian law creates a legal framework for critical minerals such as lithium, cobalt, niobium, graphite, and rare earth elements, for example.

The United States intends to reach an agreement with Brazil, aiming to resolve the geopolitical dispute with China, which leads the global production of rare earths and other critical minerals. This potential dependence of the Americans, with companies wishing to process these minerals in Brazil or import large volumes from Brazil, was a decisive factor in determining the future of the project yesterday in the Chamber of Deputies.

The "golden share" of rare earths

Among the 44 amendments accepted by Jardim during the plenary vote, which brought about several changes to the report, perhaps the most important was the creation of the National Council for the Industrialization of Critical and Strategic Minerals (CIMCE).

The name itself changed — before the vote, it was to be called the "Critical Minerals Council" — at the request of the new Chief of Staff, Miriam Belchior, NeoFeed has learned.

In addition to Belchior, the ministers Bruno Moretti (Planning), Dario Durigan (Finance), Alexandre Silveira (Mines and Energy), and Márcio Elias Rosa (MDIC), as well as Vice-President Geraldo Alckmin, also participated in the discussions with the rapporteur about the Council.

However, prior to the vote, the original format of the Council had been generating resistance from mining companies and law firms involved in the discussions. The claim was that by requiring "prior approval" for each critical mineral production project, even before the mining company's commercial decision, the Council would be creating enormous legal uncertainty.

After discussions with mining sector entities and government ministers, however, the rapporteur removed the "approval" clause from the text and replaced it with "ratification." According to him, the change is less rigorous and will not occur at all stages of the process. This resolved disagreements.

"Many lawyers warned us that this could be seen as interference in the companies," Jardim stated.

Therefore, the Council will be responsible for approving any corporate changes in mining companies with rights over critical minerals, such as mergers and acquisitions, which must be reported to this government council. This practice is common in the sector, which is dominated by multinational corporations, most of which are headquartered abroad.

“The Council was an antidote to Terrabras, because the State doesn't need an instrument of intervention, it needs control over strategic minerals,” said Jardim. “Before, there was this idea of controlling capital, even preventing foreign capital from coming in, but we overcame all that.”

The composition of the Council still needs to be defined by executive decree, but the bill stipulates that it will include representatives from up to 15 federal agencies, states, the Federal District and municipalities, the private sector, and an academic. In addition to approving corporate changes, the Council will also have to analyze and approve projects in partnership with the National Mining Agency (ANM); develop a Critical and Strategic Minerals Plan; and define and update which substances qualify as critical and strategic minerals.

The government's main objective in creating this Council was to give it a sense of national sovereignty, as the Presidential Palace was concerned about excessive exports or the dominance of the international market in the production and processing of these critical minerals. This is because the issue has gained geopolitical importance, demanding that countries take a stand on the matter.

"The Council brings the idea of sovereignty, which is a constitutional principle. All countries that have regulated critical minerals have such control rules," the rapporteur stated.

Final report

The bill, submitted in 2024 by Congressman Zé Silva (União-MG), establishes the National Policy for Critical Minerals – several other bills from congressmen from regions with strong mining activity, such as Minas Gerais and Pará, were also incorporated into the final bill approved yesterday. It regulates mining in Brazil, creating incentives and promoting the production, processing, and transformation of these minerals within the national territory.

Jardim's report proposes specific environmental licensing, tax benefits, and the creation of a R$ 5 billion guarantee fund (R$ 2 billion from the government alone) to finance mining projects and investments. It also includes income tax exemption on the use of trademarks, patents, and technology licenses.

On Wednesday, May 6th, to facilitate the approval of the proposal, the rapporteur made dozens of concessions to the text, which included amendments from various parties (such as PL, the main opposition party to the government) and even from former Minister Marina Silva (Environment), who is a federal deputy and recently returned to the Chamber.

Among the new measures, Jardim included a provision requiring companies operating in the critical minerals sector in Brazil to commit to technology transfer. A contribution of 0.5% of mining companies' revenue was also established, to be reinvested in innovation and technology.