Brasilia - Even before beginning its passage through the Senate, the bill (PL) that regulates the exploration of critical minerals in Brazil is already facing resistance, mainly from the mining sector, which is already moving to amend the text regarding the powers of the new council proposed to deliberate on projects for the production of rare earths and other minerals such as lithium and niobium.

Mining companies fear that the National Council for the Industrialization of Critical and Strategic Minerals (CIMCE) will concentrate too much power over company decisions, such as changes in corporate structure and mergers and acquisitions, for example.

The rapporteur for the bill in the Chamber of Deputies, Representative Arnaldo Jardim (Cidadania-SP), had initially proposed that the council require "prior approval" for each critical mineral production project. After reactions from business entities, law firms, and even the government, Jardim replaced the term with "approval" in the final version of his report, which was ultimately approved by the Chamber.

Nevertheless, mining companies remain concerned about the alleged excessive power of the "Big Council," fearing that these government authorizations will continue to generate legal uncertainty for future business decisions and hinder investments in the area.

This week, at a closed seminar hosted by the American Chamber of Commerce for Brazil (Amcham Brasil) at a hotel in the federal capital, business leaders expressed renewed concern about the issue, in the presence of parliamentarians and the American embassy in Brasília.

Jardim, who attended the meeting, admitted to NeoFeed that there is an effort by business entities to restrict the Council's powers in the Senate vote on the bill. However, he believes the meeting served to clarify important points in his report, which is the basic text to be analyzed by the senators.

“We established a Council as an alternative to Terrabras [the regulatory agency advocated by the PT]. I opted for a Council where the government would have minimal control over the process. The business sector would prefer the Council to have less power, but I believe I have managed to dispel any doubts regarding legal certainty,” he stated, explaining that the bill that came from the Chamber preserves the State's role of public oversight, but at the same time seeks to balance business demands.

"Doubts that arose are being dispelled, and the impact that was announced, that the new legislation could cause some instability in business, has in no way been confirmed," he added.

Jardim also informed that he should have a conversation with the president of the Senate, Davi Alcolumbre (União-AP), to seek speed in the voting and emphasize the importance of the issue being resolved in Congress this year.

He understands that the proposal has not yet progressed properly in the Senate, but this is due to the current political turmoil between the government and Alcolumbre himself. If the bill passes in the Senate, but with changes to the text, it needs to return to the Chamber of Deputies. However, so far, there isn't even a senator appointed as rapporteur for the bill.

"Nothing from the government is moving forward in the Senate at the moment. It's not a problem with the project itself, it's a political problem. The controversy isn't about the content of the project, but rather because it's part of the general difficulties President Lula is facing [in the Senate]," the congressman added.

In a hearing on Thursday, May 28, at the Senate Infrastructure Committee, the CEO of the Brazilian Mining Institute (Ibram), Pablo Cesário, said that the most urgent issue in the debate on the subject in Congress is finding "the fine balance between state control and market freedom."

The executive further argued that any mechanisms that discourage investors pose a concrete threat to the sector, given that a significant portion of Brazilian mining companies seek financing abroad in countries such as Canada and Australia, and that 65% of the resources of the Brazilian stock exchange are of foreign origin.

Even the president of the National Mining Agency (ANM), Mauro Henrique Moreira, the sector's regulatory agency, raised reservations about the new council model, approved by federal deputies.

"I think he ends up orchestrating and taking on responsibilities that are typical of regulation, meaning he absorbs or may even have an overlap with the typical activities of the ANM (National Mining Agency). This is a cause for concern," he highlighted.

Moreira explained that there is another similar body, the National Council for Mineral Policy, created by the government last year, with the participation of 18 ministers, who also have seats on other public committees.

"Given the dynamics we need, this makes quick and efficient decision-making difficult. For those with expertise and knowledge of how the market works, we already have a ready-made structure [of norms and rules], so it brings a certain level of concern."

Minerals Bill

The bill, submitted in 2024 by Congressman Zé Silva (União-MG), establishes the National Policy for Critical Minerals. It regulates the exploration of these minerals in Brazil, creating incentives and promoting their production, processing, and transformation within the country.

The text approved in the Chamber's plenary session, based on Arnaldo Jardim's report, proposes specific environmental licensing for critical minerals, tax benefits, and the creation of a guarantee fund of R$ 5 billion (R$ 2 billion from the government alone) to finance projects and investments in this type of mining. It also provides for income tax exemption on the use of trademarks, patents, and technological licenses.

The proposal also stipulates that companies in the critical minerals sector in Brazil commit to technology transfer. A 0.5% tax on mining companies' revenue, to be reinvested in innovation and technology, was also established.