Brazil’s House Approves New Critical and Strategic Minerals Legal Framework

On May 6, 2026, Brazil’s House of Deputies approved the text of the Critical and Strategic Minerals Bill. The bill establishes a new legal framework for critical and strategic minerals production with a focus on national security, local manufacturing, and sustainability. The bill was approved with wide political support and was sent to the Federal Senate. The House-approved version of the bill substantially increases Brazilian federal government oversight over critical and strategic minerals development in the country.

Context

Brazil has the world’s second-largest mapped rare earth reserves and significant reserves of other critical minerals, but limited domestic production. In recent years, increased demand for these minerals, a more assertive U.S. foreign policy to secure access to them, and uncoordinated policy activity by Brazilian mining states prompted Brazil’s Congress to debate a new legal framework for the sector.

China is presently the top recipient of Brazil’s mineral exports by a significant margin. Brazil’s critical minerals engagement with the U.S. remains relatively fragmented, consisting of framework-level cooperation and project-specific agreements, including a bilateral working group created in 2020, joint geological research, a memorandum of understanding with the Brazilian state of Goiás, and bilateral dialogue in the business community. Discussions are underway in pursuit of a more formal and comprehensive relationship in this area.

The Critical and Strategic Minerals Bill establishes the country’s first National Critical and Strategic Minerals Policy (“PNMCE”) with nine instruments and a new governance body with investment screening powers. This is potentially a first step towards a “Brazilian CFIUS,” akin to the inter-agency Committee on Foreign Investment in the United States (“CFIUS”) that reviews foreign investments in the U.S. to assess national security risks. The bill also creates a mandatory traceability system for critical and strategic minerals projects and transactions. While the bill creates two categories—“critical” and “strategic”—, it does not identify which minerals are listed in each category. The executive branch will make this determination in the regulatory implementation of the legislation.

The Critical and Strategic Minerals Bill also covers the production of fertilizers, a key and sensitive input for Brazil’s large agricultural sector. The Russian invasion of Ukraine in 2022 and the U.S. and Israeli attacks on Iran in 2026 increased the Brazilian federal government’s concern about the country’s overreliance on imported fertilizers and awareness of the need to expand local production.

Policy and Instruments

The new critical minerals policy focuses on boosting and accelerating supply chain development, from research to consumption; generating social and economic benefits for Brazil; and localizing, as much as possible, production and industrialization of critical and strategic minerals. It will be implemented through at least nine policy instruments:

1. The National Register of Critical and Strategic Minerals Projects (“CNPMCE”), a public access database of projects that serves as an oversight mechanism and as a basis for the implementation of other policy instruments;
2. The Mining Activities Guarantee Fund (“FGAM”), which seeks to boost local strategic minerals projects. The FGAM will be partially funded by the Brazilian federal government with up to Brazilian Real (BRL) 2 billion, equivalent to USD 400 million, as well as by a mandatory sectoral contribution of 0.2% of gross operating revenue of companies involved in critical and strategic minerals projects during the first six years, with another 0.3% destined to research and development (“R&D”) projects;
3. The Federal Critical and Strategic Minerals Development and Transformation Program (“PFMCE”), to provide up to BRL 1 billion, equivalent to USD 200 million, in tax credits for Brazil-headquartered companies per year, for five years, favoring companies that hire locally and adopt “Buy Brazilian” commitments for products and services;
4. A Low-Carbon Mining Certificate (“CMBC”), to be requested and issued on a voluntary basis;
5. Public tenders of critical and strategic minerals areas by the National Mining Agency (“ANM”), the existing sector-specific federal regulator;
6. Private streaming and mining royalties contracts;
7. Critical and strategic minerals R&D projects;
8. The National Critical and Strategic Minerals Research, and Technological and Workforce Development Network (“RNMCE”), to support R&D projects; and
9. Other tax, financial, and regulatory incentives for the critical and strategic minerals supply chain.

All instruments will be regulated by the executive branch through ANM and the new governance body detailed below.

Governance and Veto Power

One of the most relevant provisions of the Critical and Strategic Minerals Bill is the creation of a new governance body—the National Critical and Strategic Minerals Industrialization Council (“CIMCE”). Although ANM is the existing independent federal regulatory agency, CIMCE will have broad policy formulation and regulatory powers. It will play a key role in implementing the regulatory framework to make the new policy instruments fully operational.

One of CIMCE’s main responsibilities will be the approval of any shareholding change in companies involved in critical and strategic minerals projects—a de facto veto power over mergers, acquisitions, and other relevant changes in corporate structures. In practice, this is a new investment screening mechanism, a first step towards a Brazilian version of the U.S. CFIUS. The Council must also approve access to certain geological information by foreign companies and local companies controlled or influenced by foreign entities. In addition, CIMCE will also decide on international critical and strategic minerals supply agreements deemed to affect Brazil’s economic security and geopolitics, as well as on the use of government-owned rights of critical and strategic minerals exploration.

CIMCE will also have responsibility for prioritizing projects based on criteria that will include hire local and Buy Brazilian commitments; localization of relevant supply chain parts; and perceived national interest; among others.

Next Steps

Before becoming law, the bill needs to be approved by the Senate. If amended, it will return for a new House vote. There is a sense of urgency in Congress to approve the bill despite the slowdown in legislative activity in view of the upcoming general election in October 2026. Once signed into law, the Critical and Strategic Minerals Bill will require substantial regulation and implementing resources.

Although the House-approved version of the bill increases federal government oversight over critical and strategic minerals development, it does not establish a state monopoly. There is also no “ex ante” limit to foreign investment despite CIMCE’s investment screening powers. Members of President Luiz Inácio Lula da Silva’s left-leaning Workers’ Party (“PT”) support a more interventionist model, that includes the creation of a state-owned company to implement the new policy. Discussions on this alternative model may resurface in the debates in the Senate.

If you have any questions concerning the materials discussed in this update, please contact the following members of our Latin America and Critical Minerals Public Policy teams.