Brazil’s New Mining Law: Beyond Raw Extraction

On 16 September 2026, President Luiz Inácio Lula da Silva signed Law No. 15,506, establishing a national policy to shift Brazil from a raw-material exporter to an industrial processor of critical minerals. The move aims to capture more value domestically, though success hinges on navigating severe capital, technology, and regulatory hurdles.

Editorial·September 28, 2026·reads: 653

Brazil’s New Mining Law: Beyond Raw Extraction

Brazil currently holds the world’s second-largest rare earth reserves, yet its industrial footprint remains thin. While the country supplies 93 percent of the global niobium market, most other critical minerals are exported with minimal refinement. The new council, chaired by the presidency, is tasked with overseeing a transition toward midstream processing—the stage where raw minerals are converted into the components needed for electric vehicles and wind turbines.

The Challenge of Industrialization

The law seeks to bridge the gap through tax credits of up to 20 percent for processing expenditures and a potential R$2 billion guarantee fund. However, these are prospective ceilings rather than active disbursements. The state now possesses the power to screen foreign investments and control supply agreements, a measure intended to encourage domestic value-add. Yet, the economic reality is stark: refining projects outside established hubs like China face operating costs roughly 50 percent higher. Without clear, transparent criteria for the newly formed council’s oversight, there is a risk that aggressive screening could deter the very foreign capital needed to build local separation facilities.

Technical barriers further complicate the ambition. Specialized magnet production relies on equipment and expertise currently concentrated in only a few global markets. While a recent pilot project in Minas Gerais processed its first 20-kilogram batch of rare earth material, commercial-scale capacity remains years away. Brazil’s reliance on renewable energy—which accounted for 86.8 percent of its electricity in 2025—offers a competitive advantage for low-emission manufacturing, but that asset must be paired with consistent infrastructure and a predictable regulatory environment. Ultimately, the law provides the tools for change, but the construction of actual processing plants will depend on whether the government can make domestic production commercially viable against entrenched global competitors.