Brazil’s New Critical Minerals Law: Sovereignty Ambitions Meet Investor Uncertainty

John Price
Managing Director
AMI

September 16th, 2026, was an historic day here in Brasilia.  President Lula signed Brazil’s new Política Nacional de Minerais Críticos e Estratégicos (PNMCE) — the Critical and Strategic Minerals Law — at a Planalto ceremony in which he framed the measure as a defense of national sovereignty against what he called adversaries who had “fallen to their knees” before the United States, declaring that “our sovereignty is not for sale.” Behind the political theater, the law reshapes how Brazil governs a sector that holds an estimated quarter of the world’s critical mineral reserves, and it does so in ways that mining executives and legal analysts say leave crucial questions unanswered.

What the Law Actually Does

The centerpiece of the PNMCE is a new body, the Conselho Nacional para a Industrialização de Minerais Críticos e Estratégicos (Cimce), tied directly to the Presidency rather than the Ministry of Mines and Energy, which had lobbied to house it. Day-to-day operations will run through the Ministry of Development, Industry and Trade (MDIC). Cimce brings together representatives of roughly 13 federal ministries — up to 15 federal seats in total — alongside states, municipalities, industry, mining companies and academia, though the state retains firm control of the voting balance. 

Cimce’s mandate is broad: it will coordinate, plan and monitor the national minerals policy, draft Brazil’s National Plan for Critical and Strategic Minerals, select and approve “priority” projects for fiscal incentives, and control access to strategic geological data. Its most consequential power is the authority to homologate — effectively approve or block — transfers of corporate control in companies holding rights to critical minerals, and to block contracts or partnerships with foreign firms or governments deemed to threaten national sovereignty or domestic supply. 

On the incentive side, the law creates a guarantee fund of roughly R$7 billion (R$5 billion in private capital plus a R$2 billion federal contribution) and a tax credit capped at 20% of qualifying investment, allocated through competitive bidding with an annual national cap of about R$1 billion between 2030 and 2034. Beneficiary companies must commit 0.3% of gross operating revenue to R&D for at least six years and contribute a further 0.2% to the guarantee fund. Mineral research (exploration) authorizations, meanwhile, are capped at a non-renewable ten years — a point the industry fought hard, and lost, on.

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Where the Risk, Cost and Delay Come From

The law’s supporters, including Minister Alexandre Silveira, insist Cimce “is not a barrier to foreign investment” but simply gives Brazil “the capacity to decide the terms” on which capital enters the sector. The mining industry’s own consultants disagree, and their objections point to concrete sources of friction rather than abstract sovereignty concerns. 

The first is scale versus expertise. The sector registers more than 5,000 corporate transactions a year, and a council dominated by political appointees with little technical grounding in geology, engineering or mining economics is now expected to screen an unspecified subset of them for national-security relevance. Frederico Bedran, a director at the association representing mining municipalities, warned that the law creates “insegurança jurídica e uma imprevisibilidade muito grande” (legal insecurity and very great unpredictability) because “os requisitos não estão previstos” — the requirements themselves are not defined in the bill. Senate legislative consultants reached the same conclusion before passage, noting the homologation requirement “carece de critérios objetivos e prazos de decisão claros” — it lacks objective criteria and clear decision deadlines. 

That gap matters commercially. Without a statutory clock or published threshold tests, any M&A deal, joint venture, technology-transfer agreement or even routine data-sharing arrangement involving a critical-mineral asset could sit in an undefined review queue, with no guarantee of a timely yes or no. IBRAM (the Brazilian Mining Institute) pressed, unsuccessfully, for the criteria to be written directly into the law rather than left to executive discretion, for the council to be “o menos intrusivo possível,” and for firm response deadlines — arguing that legal certainty, not the absence of oversight, is what preserves Brazil’s standing as a trustworthy mining jurisdiction. 

Layered on top is fiscal uncertainty: the 20% credit cap and competitive, capped-pool allocation mean a project’s economics cannot be modeled with confidence until implementing rules define eligibility tiers, and Brazil offers nothing comparable to the 30-year fiscal stability guarantee in Argentina’s RIGI regime or the unconditional 10% production credit available in Australia — leaving Brazilian projects less bankable, on paper, than rivals elsewhere in the hemisphere. The rigid, non-renewable ten-year exploration window compounds this, since mining’s geological and permitting cycles routinely run much longer, raising the risk that companies lose sunk exploration investment through no fault of their own. Municipalities, whose land, water and infrastructure bear the brunt of mining activity, were given only a single seat on Cimce, and Fiemg (the Minas Gerais industry federation) is still pushing for a seat for national industry — both signs that the council’s composition remains contested even after signature.

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What Executive Decrees Could Fix — Without New Legislation

Critically, the law itself defers most operational detail: the executive has up to 90 days from publication to regulate Cimce’s structure, install it, and define the “objective criteria” separating ordinary commercial deals from those warranting national-security review. That 90-day window is where much of the damage could be undone by decree rather than by returning to Congress. 

A regulamentação could publish quantitative, disclosed thresholds — deal size, buyer’s jurisdiction, resource type, dual-use risk — instead of leaving classification to case-by-case political judgment. It could impose a hard statutory clock, potentially with a “silence is approval” default, so transactions cannot stall indefinitely. It could carve out routine, sub-threshold deals from homologation entirely, protecting the bulk of the 5,000-plus annual transactions from unnecessary review. It could staff Cimce’s technical secretariat with career specialists from the Agência Nacional de Mineração and the geological survey (CPRM) to counterbalance the council’s political composition, and it could replace the rigid ten-year exploration cap with milestone-based extensions. None of these fixes requires new legislation — they are exactly the kind of calibration Silveira has already promised, with a first decree addressing governance expected within days of signature and finer transaction-screening rules to follow.

Part of a Broader Global Pattern

Brazil’s law is not an outlier; it is a fairly typical entry in a fast-accelerating wave of state intervention in critical minerals worldwide, one that Lula himself invoked by comparing today’s competition to a 19th-century gold rush. Indonesia’s nickel export ban forced downstream processing investment and has become a template other resource-rich nations are emulating. The Democratic Republic of Congo banned cobalt exports in 2025 before shifting to production quotas that rattled battery supply chains. Vietnam has tightened state oversight of rare earth mining and halted unprocessed exports. Chile continues to pursue state-driven lithium development. China broadened, then paused, rare earth export controls in late 2025, leaving the regulatory apparatus in place for potential reactivation, while the United States has signed more than twenty critical-mineral supply agreements since January 2025 — including direct federal involvement in the Serra Verde rare earth project in Goiás — and both Washington and Brussels now treat critical minerals as national-security assets warranting stockpiles and dedicated legislation like the EU’s Critical Raw Materials Act. September’s BRICS declaration explicitly affirmed members’ “sovereign rights over mineral resources.” Seen against that backdrop, Brazil’s Cimce is less an aberration than confirmation that governments everywhere are abandoning laissez-faire minerals policy for direct, discretionary control — leaving investors everywhere, not just in Brazil, to price in a new and less predictable category of political risk.

Sources

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John Price

John Price is the Managing Director of Americas Market Intelligence. With 20 years of experience in Latin American market intelligence consulting, John has supervised nearly 1,200 client engagements and advises clients in more than 20 countries across Latin America. John’s areas of focus for AMI Perspectiva include Latin America’s natural resources, logistics and industrial products industries.

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