Silveira cites Serra Verde when defending "control" over critical minerals

The Minister of Mines and Energy, Alexandre Silveira, defended this Friday (10) the processing, in the Senate, of the project that creates the National Policy on Critical and Strategic Minerals and stated that the text approved by the Chamber of Deputies will give the government instruments to "control" changes in share control in companies operating in the sector.

The statement was made during a meeting at Palácio do Planalto on critical and strategic minerals, called by President Luiz Inácio Lula da Silva. The meeting brought together ministers, researchers and members of the mineral sector.

Silveira cited the case of Serra Verde, a producer of rare earths in Goiás, when defending that public authorities have mechanisms to monitor and approve operations considered sensitive.

"The project that will give us sovereignty over our materials, as it clearly proposes ways to develop these chains in our country. It gives us the right to approve changes in share control, as happened now in Goiás", said Silveira.

According to the minister, the government became aware of the operation involving Serra Verde through the press. For Silveira, this type of situation shows the need for formal instruments for the State to monitor corporate changes in assets considered strategic.

"With the project, we will be able to control the change in shares of companies that want to invest in Brazil", he stated.

The sale of Serra Verde became a warning sign within the government. The company, which operates the Pela Ema project, in Goiás, is the only rare earths venture in commercial activity in Brazil, a group of minerals used in permanent magnets, electric cars, wind turbines, electronic equipment and defense systems.

In April, the American company USA Rare Earth announced an agreement to acquire Serra Verde in an operation valued at around US$2.8 billion. The deal began to be treated by the government as an example of Brazilian vulnerability in a strategic mineral chain.

The case also gave strength to the debate on the creation of a national council for critical minerals. According to the proposal approved by the Chamber, the body will be linked to the Presidency of the Republic and will have responsibilities to define priority projects, establish framing criteria, monitor sensitive operations and encourage the addition of value in the country.

In practice, the proposal expands the government's power over critical and strategic minerals by creating a body capable of interfering in decisions currently driven mostly by the market. The change could affect purchases of mineral assets, changes in share control, offtake contracts and operations with foreign companies in chains considered essential to national sovereignty.

Mining companies, especially small and medium-sized ones, criticize this point and state that any power of veto, approval or control must be accompanied by objective criteria. The private sector's argument is that unclear rules can increase regulatory uncertainty, delay projects and make it difficult to attract foreign capital to ventures that are still in their initial phase.

Silveira, however, argued that the text is necessary so that Brazil does not continue just exporting raw materials. According to the minister, the policy should serve to organize the production chain, stimulate local processing and ensure that decisions on strategic assets undergo some level of public monitoring.

The discussion takes place amid the government's attempt to formulate a national strategy for critical minerals, at a time of global competition for inputs used in the energy transition, defense industry and cutting-edge technologies.

Source: CNN