Brazil to pursue rare earths policy this year, not state-owned firm

Brazil’s mining regulator chief said on Tuesday he expected a national policy for critical minerals to be unveiled within the next two to three months, adding that a proposal to create a state-owned company for rare earths was not a government initiative.

Mauro Sousa, director-general of Brazil’s National Mining Agency (ANM), told a press conference that 13 bills currently before Congress addressed rare earths and critical minerals.

In recent days, new bills proposing the creation of a state-backed entity dubbed “Terrabras” have been introduced by lawmakers, prompting mining industry association Ibram to push back against the idea.

Limited refining capacity

The group said on Monday that Brazil’s weakness in rare earths mining did not stem from a lack of state involvement, but rather from limited industrial-scale separation and refining capacity, and other factors such as insufficient financing and legal uncertainty that deters investment.

“We have not yet examined these (Terrabras) proposals in detail to assess their content,” said Sousa.

He said the government was in talks with congressman Arnaldo Jardim on a bill to create a national policy for critical and strategic minerals – which did not include a provision for a state-run company – and had requested that uranium be included.

The bill sponsored by Jardim was expected to be approved later this year, as discussions were already at an advanced stage, added Carlos Leonardo Durans, director of the Department of Development of Intermediate Inputs at the Ministry of Development, Industry, Trade and Services.

“We want to facilitate capital inflows with value-added requirements, but so far there has been no discussion about creating a state-owned critical minerals company,” he said at the same press conference.

President Luiz Inacio Lula da Silva has repeatedly said Brazil should not remain merely an exporter of commodities in the rare earths sector, stressing the need to develop domestic processing capacity in Latin America’s largest economy.

Despite little production, Brazil has vast reserves of these minerals, which are essential for high-tech equipment manufacturing.

At the same event, Julio Nery, mining affairs director at Ibram, said more than 10 “highly promising” exploration projects were under way in Brazil, particularly targeting ionic clays, but noted they still depended on geological studies.

“To bring a mine online from scratch, from the first drilling, it usually takes around 10 years,” Nery said.

(By Marcela Ayres; Editing by Alex Richardson)