By Mateo Bueno Sá
Brazilian President Luiz Inácio Lula da Silva told would-be foreign investors on Thursday that capital will not come to Brazil without fiscal and legal responsibility. He spoke at the first meeting of the National Council on Critical Minerals, where the government also released an initial list of 27 minerals it considers critical and strategic.
Lula's message to investors on Brazil's mining sector
Lula's remarks were aimed squarely at those who put money into mining projects. "If we want to attract capital, we have to be serious. People will put money here if they see their investments will create the benefit for their objectives and, at the same time, generate financial return," the president said.
He then added: "That is why we have to have legal responsibility, that is why we have to have fiscal responsibility, and that is why we can't play around with partnerships."
The 27 critical minerals in three priority classes
The government split the list into three classes by priority:
- Class I (high priority): rare earths, graphite, lithium, nickel, cobalt, copper, manganese, silicon and uranium.
- Class II (medium priority): tungsten, chromium, vanadium, tantalum, titanium, phosphate, potassium and sulfur.
- Class III (low priority): niobium, tin, iron, zinc, gold, magnesium, molybdenum, thorium, aluminum and the platinum group.
In practice, projects involving Class I and Class II minerals may be subject to screening of both shareholder control and sales contracts. For Class III, the review looks only at shareholder control.
Who can get government support
Only ventures focused on these 27 minerals and listed in the National Register of Projects (Cadastro Nacional de Projetos) can receive the support provided for by law. One of the instruments mentioned is the Guarantee Fund for Mining Activity (FGAM), created to share risk in bank lending.
According to what was presented, the classification took into account geopolitical risk, the geographic concentration of production, the potential for substitution, Brazil's position in the supply chain, and the country's dependence and vulnerability.
Why it matters
The list shows which minerals the Brazilian government wants to prioritize as it courts investment in the sector. Several of the Class I items, such as lithium, nickel, cobalt and rare earths, are among the minerals at the center of the global debate over strategic supply chains.
The industry, however, points to a long-standing bottleneck: financing in the early stages of exploration and mining, precisely where private money tends to hesitate. The fund mentioned at the meeting is meant to address part of that problem by sharing risk in bank credit.
VDD Analysis
Lula talks about seriousness, but the same meeting that calls for fiscal responsibility opened the door to screening of shareholder control and sales contracts. For the investor the government wants to attract, the question is simple: how much of Brazil's subsoil will end up under the scrutiny of the state? Those who defend economic freedom know that legal certainty is built on clear, predictable rules and less intervention.
