Critical minerals PL: incentives advance, but risks persist

Bill No. 2,780/2024, authored by deputy Zé Silva (União-MG) and substituted by deputy Arnaldo Jardim (Cidadania-SP), establishes the National Policy for Critical and Strategic Minerals (PNMCE) and creates the National Council for the Industrialization of Critical and Strategic Minerals (CIMCE). Approved by the Chamber of Deputies on May 6, 2026, the project went to the Federal Senate, where it awaits the appointment of a rapporteur.

The text reflects the geopolitical relevance of critical minerals in the energy transition and seeks to position Brazil in this value chain. Alongside important stimulus instruments, however, it incorporates state intervention mechanisms that deserve improvement so that they do not produce effects contrary to those intended.

The policy combines economic incentive instruments and regulatory mechanisms aimed at the objectives of the PNMCE. While the first represent important advances for the sector, others require greater attention during the proposal's progress in the Senate.

Among the planned measures are the creation of the Mineral Activity Guarantee Fund (FGAM), with an initial contribution of R$2 billion by the Union and a potential of up to R$5 billion; the establishment of the Federal Program for the Beneficiation and Transformation of Critical and Strategic Minerals (PFMCE); the granting of Social Contribution on Net Profit (CSLL) credits for priority projects; the inclusion of projects in the Special Incentive Regime for Infrastructure Development (REIDI); and the qualification to issue infrastructure debentures.

These measures represent progress for a sector lacking instruments compatible with its risk profile. It is essential that the review in the Federal Senate and infralegal regulation ensure equal access to benefits by companies at all links in the chain: mineral research, mine development, mining, processing and transformation.

Early phases, such as geological research and mine development, face high risks and severe capital constraints. If incentives focus only on transformation, the previous stages tend to lose competitiveness, compromising the development of new projects and the expansion of the mineral chain itself.

Although PNMCE seeks to retain higher value-added stages in Brazil, avoiding the export of raw ore, access to incentives by junior companies and mining companies should not be conditioned on the product remaining in the country until the mineral transformation phase. This will be carried out by companies with a different profile and capital structure than those at the first links in the chain.

The policy must encourage national production to neutralize the effects of structural bottlenecks in local industry, such as high taxation on Capex, slow recovery of tax credits, high cost of capital, high cost of formal contracting and technological lag. The mineral sector cannot alone bear the cost of reindustrialization in a country whose manufacturing industry makes an increasingly smaller contribution to GDP.

The main point of attention, however, is the provisions relating to the control of transactions carried out by companies in the sector. The approved text assures CIMCE, in conjunction with the National Mining Agency (ANM), the approval of operations involving change of corporate control, transfer of relevant participation or that generates significant influence for foreign legal entities, as well as international contracts or partnerships that involve the supply of critical minerals under conditions that may affect the economic or geopolitical security of the country.

The forecast raises concern. The sector distanced itself from the more radical proposal discussed in other projects, such as the creation of a state-owned company for the exploration of rare earths and critical minerals, but the final wording of the provisions of PL 2,780/2024 (art. 3, § 2, and art. 41, § 1º, III, "b") involves an excessive margin of discretion.

Without going into the merits of the questionable constitutionality of these devices, the open terms provided for in the text, such as "conditions that may affect economic or geopolitical security", grant CIMCE and ANM wide decision-making latitude without objective parameters, which creates legal uncertainty for investors and financiers, especially in M&A operations, financing and offtake contracts, instruments essential to the viability of projects in the sector.

The control format through the approval of CIMCE and ANM, if maintained by the Federal Senate, has a high potential to restrict financing and remove capital, whether in the form of investment or debt, from critical and strategic mineral projects. In a sector intensive in long-term investments, regulatory predictability is an essential condition for decision-making by economic agents.

PL 2,780/2024 represents a relevant milestone by recognizing the strategic importance of critical minerals and structuring a national policy dedicated to the topic. For the PNMCE to fulfill its objectives, it is necessary for the Federal Senate to make adjustments to the text. First, guarantee equality in access to benefits for all links in the chain, without conditioning the initial phases to vertical integration commitments that are not theirs. Second, improve the mechanism for approving operations by CIMCE and ANM, establishing objective criteria, defined deadlines and greater regulatory predictability, reducing the discretion currently foreseen.

Brazil has exceptional geological conditions to become a protagonist in the global chain of critical minerals. Public policy must be efficient, isonomic and predictable so that this natural competitive advantage is converted into concrete economic development.

* Oswaldo Dalla Torre is a partner in the corporate and foreign investment, mergers and acquisitions and mining areas of TozziniFreire

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Source: CNN