Brazil’s Congress approves national policy on critical and strategic minerals

On September 2, 2026, the Brazilian Senate approved Bill No. 2,780/2024, establishing the National Policy on Critical and Strategic Minerals (PNMCE). Since the bill had already been approved by the House of Representatives and no significant amendments were made by the Senate, it will now be submitted to the President’s office to be passed into law (or vetoed in part or in full).

Context and key points of the bill

At a high level, the bill seeks to position Brazil within the global critical minerals landscape at a time when demand is projected to surge, driven by the energy transition, advanced-technology applications, and defense and security spending worldwide. At the same time, there is uncertainty about whether existing and planned mines can keep pace with that demand, and supply chains have proven unreliable. Compounding these challenges, the long lead times inherent in mining mean that meeting future demand hinges on discovering new deposits, bringing new mines online, and sustained investment in research, development, and innovation.

Against this backdrop, the bill establishes mechanisms for stronger federal oversight of the mining sector, particularly for critical and strategic minerals, as an exercise of national sovereignty. It creates a National Council for the Industrialization of Critical and Strategic Minerals and envisions closer government monitoring of projects involving these resources. Corporate transactions, acquisitions and dispositions of mineral rights, as well as offtake or supply contracts involving critical and strategic minerals, will be subject to government approval (referred to in the bill as homologação – a formal ratification process under Brazilian administrative law).

The bill also introduces incentives to encourage exploration and mining of critical and strategic minerals. These include tax credits against the CSLL (a Brazilian federal tax on corporate net income) and incentivized debentures – both conditioned on domestic mineral processing and transformation to keep more value within Brazil. Additionally, the bill provides for the creation of a Mineral Activity Guarantee Fund, to which companies dealing in critical and strategic minerals must contribute 0.2% of gross operating revenue for the first six years. Companies are also required to invest 0.3% of gross operating revenue in research, development, and innovation during the same initial six-year period, rising to 0.5% thereafter.

The main features of the PNMCE as approved by the Congress are outlined below, along with a brief analysis of each.

Critical minerals, strategic minerals, and urban mining

While the bill does not specify which minerals qualify as critical and which as strategic, it sets out the criteria for each designation. Critical minerals are those essential to key sectors of the national economy whose availability is or could be at risk due to supply-chain vulnerabilities – particularly when scarcity could jeopardize the energy transition, food security, or national security in strategic sectors. Strategic minerals are those for which Brazil holds significant resources and reserves that can contribute to a trade surplus, technological advancement, regional development, or reductions in greenhouse gas emissions.

Under these guidelines, the National Council for the Industrialization of Critical and Strategic Minerals will determine which minerals fall into each category and will review the classifications every four years.

The bill also addresses urban mining of critical and strategic minerals, defined as the collection, dismantling, separation, processing, and refining of these minerals from e-waste, batteries, end-of-life vehicles, construction debris, and landfills. It includes a range of measures to promote urban mining.

Government approval of transactions involving critical and strategic mineral companies and projects

The PNMCE is designed to promote the sustainable exploration, mining, processing, and transformation of critical and strategic minerals, as well as to foster the development of related industries, distribution, trade, and consumption. It also encompasses urban mining. Implementation of the PNMCE must observe principles of regulatory stability, legal certainty, and predictability to attract investment and ensure sustainable mining development. At the same time, activities involving critical minerals will be subject to national sovereignty considerations and the primacy of the public interest.

This latter point is especially significant because the bill requires government approval (homologação) for the following:

• Any direct or indirect change in corporate control of a company holding mineral rights related to critical or strategic minerals;
• The acquisition of significant influence by a foreign entity over such a company;
• Access to geological data deemed of strategic interest;
• Execution of supply contracts for critical or strategic minerals on terms that could affect the country’s economic or geopolitical security;
• The sale, assignment, or encumbrance of mineral rights related to critical or strategic minerals.

Except for changes in corporate control – which will be handled by the National Council – a future implementing regulation will determine whether the remaining items require approval from the Council or the ANM (Agência Nacional de Mineração, Brazil’s national mining regulatory agency).

The heightened state oversight through this approval mechanism could affect M&A transactions, asset deals, and a wide range of commercial contracts, including offtake agreements.

This will need to be factored into legal due diligence and deal structuring. Buying and selling mining projects and companies is routine in the sector, given the varying risk profiles and expertise of market participants. Depending on parameters for these approvals to be established in future regulations on the matter, the new requirement may be a source of uncertainty, as it introduces what is essentially a subjective government assessment.

National Council for the Industrialization of Critical and Strategic Minerals

A centerpiece of the bill is the creation of the National Council for the Industrialization of Critical and Strategic Minerals (CIMCE). The CIMCE will be responsible for proposing policies and public initiatives to develop Brazil’s value chain for critical and strategic minerals. It will have up to 20 members: up to 15 representatives from federal executive-branch agencies, one from state governments and the Federal District, one from municipal governments, one from higher education institutions, and two private-sector members with recognized expertise in mineral policy.

Among other responsibilities, the CIMCE will draft a National Plan for Critical and Strategic Minerals, determine which substances qualify as critical or strategic, and designate priority projects under the PNMCE. As noted above, it will also approve changes in corporate control of companies holding mineral rights to critical or strategic minerals, as well as certain related contracts. The CIMCE must be formally established by implementing regulations within 90 days of the law’s publication.

National Registry of Critical and Strategic Mineral Projects and project prioritization

The bill establishes a National Registry of Critical and Strategic Mineral Projects (CNPMCE) to mandate registration of projects involving these minerals and to centralize relevant project information. Registration is required for projects with an approved final exploration report confirming the presence of critical or strategic minerals, as well as for ventures located in designated strategic areas to be defined by the executive branch.

On this point, the bill does not clarify which areas would be considered strategic, the criteria for their designation, or the applicable legal framework. These gaps will need to be addressed in future regulations to provide greater legal certainty – a stated foundational principle of the PNMCE itself.

From the registry, specific projects may be selected for priority status, provided they meet the following requirements:

• Sourcing goods and services from local communities and domestic industry;
• Pursuing local development and social inclusion initiatives;
• Adopting best available technologies and best practices for waste rock and tailings management;
• Maintaining ongoing, transparent engagement with affected communities;
• Implementing measures to prevent, mitigate, and offset environmental impacts;
• Generating domestic value addition and promoting regional development;
• Safeguarding sovereignty, defense, and the national interest.

Once again, it is expected that such requirements will be defined more objectively in forthcoming regulations. The regulations should also include measures to encourage domestic processing, transformation, and industrialization of critical and strategic minerals.

Such measures may include benchmarks, requirements, and commitments for domestic value addition; preference criteria for projects that internalize stages of the mineral value chain; and obligations to report information on the volume, destination, ultimate beneficial owner, ownership chain, and degree of processing of critical and strategic minerals intended for export.

Mineral Activity Guarantee Fund and mandatory contributions

The federal government is authorized to create and participate in the Mineral Activity Guarantee Fund (FGAM) as a quota holder, contributing up to BRL 2 billion (approximately USD 350 million at current exchange rates). The FGAM’s purpose is to provide financial guarantees for priority projects involving critical and strategic minerals. Administration of the fund may be carried out by a federal public financial institution.

Companies engaged in the exploration, mining, processing, and transformation of critical or strategic minerals in Brazil will be required to contribute 0.2% of gross operating revenue, net of taxes, annually for six years, beginning when the FGAM’s implementing regulations take effect. These contributions will be used to acquire quotas in the fund.

Processing, mineral transformation, and tax incentives

A core objective of the bill is to encourage the domestic processing and transformation of critical and strategic minerals as an alternative to exporting minimally processed ore. To that end, the bill defines processing as the stage of ore treatment following extraction, in which the mineral commodity is separated from waste or tailings using physical or chemical methods. Mineral transformation is defined as the set of processes that produce a new product by altering the mineral’s chemical or physical properties after processing.

The bill authorizes the federal government to establish a Federal Program for the Processing and Transformation of Critical and Strategic Minerals (PFMCE) as a funding vehicle to promote domestic processing and transformation. Implementing regulations will set the requirements for project qualification under the PFMCE, which may include local content obligations and commitments to make a portion of production available in the domestic market.

Under the PFMCE, tax credits may be granted – in the form of offsets or refunds of the CSLL – to companies that process and transform critical and strategic minerals in Brazil. The credits are subject to an aggregate cap of BRL 1 billion per year (approximately USD 175 million) for 2030–2034 and are limited to 20% of qualifying expenditures. Allocation will be determined through a competitive process. Companies that enter into long-term supply contracts of at least five years to purchase products resulting from the processing and transformation of critical and strategic minerals may also apply. These tax credits are available only for projects deemed priorities and qualified as such by the CIMCE.

The bill also expands the existing Reidi (Regime Especial de Incentivos para o Desenvolvimento da Infraestrutura), a special tax incentive regime for infrastructure development that currently applies to sectors such as transportation, energy, and sanitation. Under the bill, Reidi benefits would extend to projects involving the mining, processing and transformation of critical and strategic minerals.

Incentivized debentures

To broaden financing options, the bill adds two new categories to the existing framework for incentivized debentures – a type of bond whose interest income is tax-exempt for individual investors, making them an attractive tool for raising long-term project finance. Both new categories are tied to projects the federal government considers priorities:

1. Projects for the processing and transformation of critical or strategic minerals; and

2. Projects for the prospecting, exploration, development, and mining of critical and strategic minerals, provided they are linked to domestic processing and transformation initiatives.

In both cases, a project qualifies as a priority only if it targets the processing or transformation of mineral concentrates, battery-grade ores, ores at concentrations suitable for producing permanent magnets for electric motors, or phosphate, potash, and nitrogen fertilizers.

Incentivized debenture issuances are capped at the capital expenditures of the relevant investment project. Additionally, only companies engaged in the exploration, mining, processing, and transformation of critical or strategic minerals with annual revenue of up to BRL 5 billion (approximately USD 875 million) may issue these instruments.

Auctions of areas with potential for critical and strategic minerals

The bill requires that areas with potential for critical and strategic minerals be given priority in auctions conducted by the ANM. It is unclear whether this refers to the existing tender process (disponibilidade) – a public-offering and auction mechanism the ANM currently uses to reallocate mineral rights – or to another auction format. Future regulations will bring more details to the matter. In addition, the minimum bid price must comply with guidelines set by the CIMCE.

The bill also stipulates that areas that are relinquished or whose mineral rights have been terminated must be auctioned within two years of the relinquishment or termination. The apparent intent is that, once this two-year window expires, the area would be deemed open and subject to the first-come, first-served system under Brazilian mining law. If implemented effectively, this could help reduce the large backlog of lapsed mineral rights that remain tied up at the ANM awaiting the tender. Future regulations will also address the matter.

Term for exploration licenses

Under the bill, exploration licenses for areas containing critical or strategic minerals will have a maximum non-extendable term of ten years. This term is absolute – no extensions, suspensions, or tolling are permitted – though the bill excludes from the calculation the period between applying for and obtaining the environmental operating license. Once the term expires, the mineral right is forfeited and made available for tender (disponibilidade).

A ten-year exploration term for critical and strategic minerals is a reasonable measure given the complexity and high-risk nature of mineral exploration. However, the drafting raises several questions. First, it is typically only possible to confirm whether an area contains critical or strategic minerals after exploration, not before. This leaves open the question, to be detailed in further regulations, of whether it would be sufficient to indicate in the exploration application that the target substance is a critical or strategic mineral. By the same logic, if a critical or strategic mineral is incidentally discovered during exploration for another substance, it remains unclear whether the exploration license would automatically become subject to the ten-year limit instead of the standard maximum of four years under existing rules.

Additionally, the prohibition on extending, suspending, or tolling the exploration term appears to disregard circumstances entirely beyond the titleholder’s control – such as a surface landowner’s refusal to grant access. Brazil’s current Mining Code includes mechanisms for resolving such conflicts, including a judicial proceeding to determine fair compensation for the surface owner and secure access. These situations should not have been overlooked, and the law should have allowed term extensions when the titleholder demonstrates diligent efforts to resolve the issue, consistent with the ANM’s current administrative guidance.

Royalty and streaming contracts

A positive feature of the bill is the ability to register royalty and streaming contracts with the ANM, giving them legal effect against third parties. This addresses a longstanding concern in the sector: without registration, royalty and streaming arrangements could be disregarded by third parties who later acquire the mineral rights. Implementing regulations should provide further detail, including clear definitions of private royalty and streaming arrangements and the obligations of third parties who acquire mineral rights subject to such agreements.

Investment in research, development, and innovation

The bill requires companies engaged in the exploration, mining, processing, and transformation of critical or strategic minerals in Brazil to invest 0.3% of gross operating revenue, net of taxes, annually for six years (beginning when the FGAM’s regulations take effect) in R&D&I projects related to those activities. After the initial six-year period, the mandatory investment rises to 0.5% per year.

Half of the R&D&I investment may be directed internally by the companies. The other half must be channeled through partnerships with junior mining companies, members of the National Network for Research, Technological Development, and Professional Training in Critical and Strategic Minerals (RNMCE), or other institutions designated by the CIMCE.

The RNMCE, referenced above, will be established by the federal government to provide scientific and technological support for R&D&I across the critical and strategic minerals value chain. It will comprise technical and higher education institutions, innovation startups, research and technology development organizations, cooperative technology entities formed by mining companies, third-sector (nonprofit) organizations, and scientific, technological, and innovation institutions.

Low-carbon mineral certificate

The bill creates a low-carbon mineral certificate (CMBC) to promote and reward mineral production with lower carbon-emission intensity. Certification will take into account the measures a mining company adopts throughout its production process to offset, mitigate, or neutralize greenhouse gas emissions, as well as the use of renewable energy and the adoption of technologies that improve energy efficiency. Emissions intensity for critical and strategic minerals will be assessed on a life-cycle basis.

Implementing regulations will govern certificates, their operational mechanics, and their alignment with international frameworks, as well as the certification system involving the CIMCE, the ANM, and companies engaged in certification, accreditation, registration, production, and procurement.

Traceability

The bill requires the development of a traceability system for critical and strategic minerals across the entire value chain to verify lawful origin, ensure socio-environmental, tax, and regulatory compliance, and safeguard the integrity of information. The system must record all transactions and participants in the value chain and include assessments of overall environmental impact; durability, reuse, and recyclability requirements; and data on circularity, reverse logistics, end-of-life destinations, and recycled content for products derived from critical and strategic minerals. The traceability system may be operated by accredited public or private entities.

Environmental permitting for critical and strategic mineral projects

One area the bill does not adequately address is the need for more streamlined environmental permitting of critical and strategic mineral projects. Other countries with critical mineral policies have sought to fast-track such projects without lowering environmental standards. On this topic, the bill states that one of the PNMCE’s guiding principles is to prioritize environmental permitting for projects covered by the policy, and one of its objectives is to support such permitting. However, the bill provides no specifics – no instruments, timelines, or concrete procedures. The effectiveness of this prioritization will depend entirely on how the various government agencies involved choose to implement it.

Similarly, a general provision calls for prioritized review of critical and strategic mineral projects by the ANM, the Ministry of Mines and Energy, and other federal, state, and municipal agencies. However, it will be up to each entity to define and implement prioritization measures on its own, given the bill’s lack of objective parameters.

Finally, the bill provides that the CIMCE will refer projects it deems strategic to the Government Council for purposes of special environmental license (an expedited licensing track for strategic projects). While extending special license to critical and strategic mineral projects is a welcome development, it remains unclear whether all projects qualified by the CIMCE would be subject to this expedited process or only some – and under what criteria.

Next steps and final considerations

Having been approved by the House of Representatives and by the Senate, the bill now moves to the President’s office for to be passed into law (or vetoed), which must take place within 15 business days of receiving the bill.

There is no question that the future law will be a landmark for Brazil’s mining sector. The global importance of critical minerals demands that Brazil take a clear stance and adopt a dedicated policy. However, the bill sends mixed signals. On the one hand, it expressly aims to attract investment and ensure legal certainty – the bedrock of the mining industry. On the other hand, it imposes a series of conditions on the development and operation of critical and strategic minerals, including government approval of corporate control transactions and certain commercial contracts, such as offtake agreements – in a sector defined by dynamism and the routine transfer of assets among players with different profiles and risk appetites. Beyond the additional bureaucratic step that government approval would entail (and the time associated with it), the criteria for granting or denying approval need to be clearly defined in forthcoming regulations.

The bill takes a positive step by creating financing mechanisms and tax incentives for the exploration and mining of critical minerals. However, by conditioning those mechanisms on domestic processing and transformation – without critically assessing economic and market conditions or Brazil’s competitiveness in this area – the bill risks undermining the very incentives it creates. Likewise, the lack of detailed provisions to expedite environmental permitting prevents the sector from addressing one of its most persistent bottlenecks: converting reserves into actual production.

As the bill is passed into law and further adequate regulations are enacted, there will be opportunities for further detailing the matter and defining specific parameters for a number of initiatives provided for in PNMCE, so that it can truly become a positive turning point for mining in Brazil.

For more information on this topic, please contact Mattos Filho’s Infrastructure & Energy, Mining, and Government Relations practices.