Brazilian Senate Passes Critical Minerals Bill, R$7 Billion in Incentives Await Presidential Approval

en.Wedoany.com Reported - On September 2, the Brazilian Federal Senate approved Bill No. 2780/2024, which establishes the National Policy for Critical and Strategic Minerals (PNMCE) and the National Commission for the Industrialization of Critical and Strategic Minerals (CIMCE). The bill underwent only textual adjustments in the Senate without changes to its substantive content, so it does not need to return to the Chamber of Deputies for a new vote. The next step is submission to the President for approval. The government incentives accompanying the policy total up to R$7 billion, including R$2 billion in funding for the Mining Activity Guarantee Fund and R$5 billion in tax credits for domestic mineral processing and transformation.

Among these, the Mining Activity Guarantee Fund (FGAM) will receive up to R$2 billion in federal government contributions, while also accepting capital contributions from eligible mining companies. The bill stipulates that during the first six years following implementation of the relevant framework, companies engaged in the exploration, mining, beneficiation, and processing of critical and strategic minerals must allocate at least 0.3% of their total gross revenue to related R&D and technological innovation, and an additional at least 0.2% to subscribe to FGAM shares; after the six-year period, the R&D investment ratio increases to at least 0.5%.

The R$5 billion in tax incentives will be used for the beneficiation and deep processing of critical and strategic minerals within Brazil, planned for implementation over a five-year period from 2030 to 2034. The relevant funds must be included in the annual budget, and companies must first have their projects qualified by CIMCE and included in the policy's priority project list before they can apply for tax credits. Mining urban recycling operations—namely, the recovery and processing of strategic minerals from materials such as electronic waste—are also included within the scope of policy support.

CIMCE will also be responsible for identifying and periodically updating Brazil's list of critical and strategic minerals, as well as designating priority projects eligible for FGAM support. The bill also incorporates qualifying critical mineral projects into the incentive bond financing framework and establishes systems for national project registration, mineral traceability, and certification of low-carbon minerals.

Following the Senate's final vote on the bill's text on September 2, it has entered the presidential signing process. The R$7 billion cannot currently be described as a "US$1.9 billion fund": only R$2 billion of it constitutes federal government funding intended for FGAM, while the remaining R$5 billion consists of tax credit allowances over a five-year period.