Brazil advances new policy for critical minerals and rare earth processing

Brazil is advancing a new National Policy on Critical and Strategic Minerals (PNMCE) to bolster its role in the global supply chain for lithium and rare earth elements. The legislation, which recently cleared Congress, aims to provide financing and tax credits for domestic processing plants to move the country beyond raw material extraction.

However, industry leaders have raised concerns regarding the policy's ability to compete with China, which currently dominates mineral processing. Mining companies, including Vale and Companhia Brasileira de Lítio, have noted that without price floors or commercial guarantees similar to those used by the United States, attracting investment for capital-intensive refining projects remains difficult. While Brazil holds approximately 25% of the world's rare earth reserves, it currently accounts for only 0.15% of global production.

Experts suggest that Brazil could differentiate itself by focusing on sustainable extraction methods, such as utilizing clay-based deposits which may offer lower environmental impacts and costs compared to traditional hard-rock mining. The new policy will establish a National Council for the Industrialization of Critical and Strategic Minerals to oversee sector development and project prioritization.