Brazil’s Senate passes rare earth minerals regulation, paving the way for boosted exploration

Brazil's Senate has approved a significant bill to regulate the exploration of critical and strategic minerals, including rare earth elements, in the country. This move marks a step toward increased exploitation of Brazil's vast reserves of rare earths, which rank second only to China in terms of reserves. The Senate's approval follows the lower house's overwhelming support on May 6.

The bill is now set to be signed into law by President Luiz Inácio Lula da Silva. The legislation establishes a legal framework for rare earths and other critical minerals, creates a fund to provide credit to mining projects, and offers tax incentives for domestic processing. Despite China's dominance in the global supply chain of critical minerals, Brazil aims to become an alternative by capitalizing on its abundant reserves.

These elements are essential for various products, such as smartphones, electric vehicles, solar panels, and jet engines. Due to China's recent export restrictions on rare earths, driven by U.S. tariffs, international interest in Brazil has surged. The U.S.-owned firm USA Rare Earth recently acquired Serra Verde, the sole commercial rare earth producer in Brazil, for around $2.8 billion.

This move illustrates the growing global interest in Brazil's rare earth resources as countries diversify their partnerships and reduce dependence on China.