Brazil eyes financial guarantees, tax breaks for strategic minerals

Brazil’s government is looking to offer financial guarantees to fund strategic mineral projects and tax incentives for their processing and industrialization, it said after the first meeting of its National Mining Policy Council on Thursday.

The meeting approved a resolution creating a working group tasked with analyzing and proposing public policies to develop the supply chain for critical and strategic minerals in Latin America’s largest economy, the mines and energy ministry said in a statement.

President Luiz Inacio Lula da Silva created the committee to advance a new policy treating strategic minerals as a matter of national sovereignty, aiming to curb exports without domestic value-added processing.

Lula told Reuters in August that the framework would help Brazil retain control over its mineral wealth and position the country as a global leader in the energy transition.

Abundant in Brazil, rare earth elements are among those critical minerals that are vital to advanced technologies and have become a flashpoint in US-China tensions following Beijing’s move to tighten export controls last week.

Despite holding the world’s second-largest reserves after China, Brazil accounts for less than 1% of global rare earths output, according to the US Geological Survey.

Brazil’s Mines and Energy Minister Alexandre Silveira told reporters that China’s tightening of export controls “naturally opens up a great opportunity for Brazil,” and a “window of opportunity” for synergies with the US in the segment.

The first meeting of the National Mining Policy Council comes as Brazil seeks to reengage with the United States on trade.

US President Donald Trump’s administration imposed a 50% tariff on Brazilian goods, citing the trial of former president Jair Bolsonaro, a Trump ally who was later sentenced to 27 years in prison for attempting a coup after losing the 2022 election.

Brazilian officials had floated rare earths as a potential topic in trade talks with Washington, but dialogue only recently gained some traction, notably after Lula briefly met Trump on the sidelines of the UN General Assembly in late September.

On Thursday, Brazil’s Foreign Minister Mauro Vieira held talks with US Secretary of State Marco Rubio in Washington, which the two sides described as positive.

Silveira said he had been invited to meet US Energy Secretary Chris Wright at this month’s G7 meeting of energy and environment ministers in Canada, where the Brazilian official intends to discuss critical minerals and data centers.

(By Marcela Ayres, Ricardo Brito and Andre Romani; Editing by David Gregorio and Jamie Freed)