Brazil Enacts New Federal Oversight, Taxes for Critical Minerals Sector

Brazil’s government has enacted a new law establishing a National Policy on Critical and Strategic Minerals (PNMCE), imposing a new financial contribution on producers and significantly increasing federal oversight over the sector crucial to the global energy transition. The law, created from Bill 2,780/2024, was signed by the President in mid-September 2026 after passing through the Federal Senate earlier in the month, immediately reshaping the operating environment for companies involved in minerals like lithium, rare earth elements, nickel, and copper. The policy's goal is to position Brazil as a major player in the global supply chain by fostering higher-value activities such as domestic processing and transformation, rather than merely exporting raw materials.

The new framework introduces two immediate operational changes that will affect company margins and governance. First, companies engaged in the exploration, mining, processing, or transformation of critical or strategic minerals must contribute 0.2% of their gross operating revenue, net of taxes, for the first six years of activity. This mandatory contribution is used to acquire quotas in the newly authorized Mineral Activity Guarantee Fund (FGAM), a mechanism intended to provide financial guarantees for priority projects in the sector. Second, the law establishes enhanced federal oversight, subjecting corporate transactions, acquisitions, and offtake agreements of critical mineral rights to government approval.

This control mechanism is concentrated in the newly created National Council for the Industrialization of Critical and Strategic Minerals (CIMCE), an advisory body linked directly to the Presidency of the Republic. The CIMCE will be responsible for defining and updating the list of substances deemed critical or strategic, approving priority projects, and—most consequentially for the industry—approving significant transactions, including changes in corporate control and deals with foreign participation. The Brazilian Mineral Exploration Association (ABPM) has already expressed concern over the broad power granted to the CIMCE, arguing that the increased federal role in day-to-day business matters may create new layers of uncertainty for investors, particularly for smaller and mid-sized mining companies.

For the government, the policy is an exercise of national sovereignty designed to secure supply chains and ensure that more value is retained within the country. The law also includes incentives aimed at offsetting the new requirements, such as tax credits—up to a potential R$5 billion between 2030 and 2034—for companies that invest in domestic mineral processing and transformation through the Federal Program for the Processing and Transformation of Critical and Strategic Minerals (PFMCE). Companies must also allocate 0.3% of their gross operating revenue to research and development. The next step for the industry will be to track the specific implementing regulations that will define the scope of CIMCE’s power and the eligibility criteria for the financial incentives, which will ultimately determine the policy's success in attracting necessary foreign investment.

What it touches: The new regulatory environment will directly affect the financial and operational plans of companies involved in metals and mining in Brazil, particularly those focused on minerals essential for batteries, electric vehicles, and renewable energy infrastructure. The law introduces a new financial outlay and a mandatory government approval step for major deals in the sector, impacting valuation models for both listed and private companies, including major players on the B3 stock exchange.