Rejecting Terrabras did not take the State out of the sector: it merely swapped direct corporate intervention owning the mine for regulatory and industrial intervention. Public control and state ownership are not synonyms.
The context is also historical. Few countries have seen their natural wealth exploited as extensively by others as Brazil, from brazilwood and gold shipped to Europe to iron ore exported for decades to be processed abroad. Rare earths, where Brazil holds the world’s second-largest reserves, offer an opportunity to break that cycle by keeping refining and value creation in the country. There is also a clear fiscal incentive: refining generates significantly more tax revenue and economic value across the supply chain than exporting raw concentrate. In a country where gross public debt stands at 82.5% of GDP, adding value is no longer simply a matter of industrial policy. It is also a revenue strategy.
This helps explain, at least in part, the decision not to create a state-owned company. Capitalizing a public enterprise while assuming the risks associated with mining and refining is difficult to justify given the country’s fiscal position. A more practical approach is to finance the value chain with private capital while the Union regulates and collects taxes, leaving the investment risk with the private sector.
Control, then, is a matter of regulatory architecture, not ownership. The instruments, from least to most interventionist:
Existing constitutional domain
Mineral resources belong to the Union (art. 20, IX), and deposits can only be mined under federal concession granted “in the national interest” (art. 176). Control over the source is already public.
Regulation of the concession
Through the National Mining Agency (ANM), under Law 13,575/2017, and the Mining Code (Decree-Law 227/1967), the government can establish requirements for processing, traceability and downstream integration, as well as regulate exploration activities. The bill establishes a non-extendable 10-year term, subject to forfeiture, and a 150% penalty for resources that are not invested in the required projects.
Inducement policy
Bill 2,780/2024, approved by the Chamber of Deputies in May and by the Senate on September 2, now awaiting presidential sanction. It creates the National Critical Minerals Policy and the CIMCE council, linked to the Presidency, and mobilizes around R$7 billion: the Mining Activity Guarantee Fund (with the Union as a quotaholder for up to R$2 billion, guaranteeing without operating), tax credits of up to R$5 billion (up to 20% of industrial costs, R$1 billion/year between 2030 and 2034, available only to those who process domestically), and incentivized debentures (Laws 12,431/2011 and 14,801/2024) directed at the industrial link. BNDES and Finep add financing for separation and refining plants — the link currently missing.
Sovereignty screening
Art. 176, §3, of the Constitution and art. 55, §1, of the Code already require prior ANM approval to transfer a mining title; but a change in corporate control — especially indirect control — that does not change the title’s name only required, under art. 81, notification and filing.
The bill seeks to close this gap y subjecting such transactions to CIMCE authorization. Shifting from “notify” to “seek authorization” creates veto power over who buys strategic assets, along the lines of the US CFIUS adding to the golden share mechanism (art. 8 of Law 9,491/1997, used at Embraer). This is also where the debate over legal certainty is most concentrated.
Tax instrument
Rather than banning exports of raw material, a potentially risky approach under WTO rules, the government could progressively adjust the Export Tax under Decree-Law 1,578/1977 to discourage shipments of raw concentrate.
It is worth remembering that compulsory industrialization without installed capacity destroys value before creating it. Closing off concentrate exports before refining capacity exists at scale scares off investment and reduces tax revenue. The mature path is progressive, predictable processing backed by public support — not an abrupt shutdown. Brazil does not need a state-owned company to exercise mineral sovereignty: it needs to keep the value of its own wealth at home, instead of exporting it raw as it has done for five centuries.
