Brazil - Market Insights

As the fifth largest territory in the world, Brazil boasts a geological endowment comprised of different provinces with a considerable variety of mineral substances. The country ranks first in the world in niobium resources; second in graphite and rare earths; third in iron ore, manganese, nickel, tantalum and tin; and fifth in bauxite reserves, to name just a few (USGS Mineral Commodity Summaries 2026).

Brazil has long been known for its iron ore production, while gold ranks second in mineral exports. The aggregates and cement industries also account for a relevant market share in the domestic market. On the other hand, the country is a heavy importer of phosphate and potash, which are extremely important for fertilizers used in agriculture. Agriculture alone is a sector that accounts for more than 7% of GDP and, if the entire production chain is considered, agribusiness represents approximately 25% of the country’s economy (according to the Confederation of Agriculture and Livestock of Brazil).

On top of that, Brazil’s mining sector has attracted attention due to the revived importance of the so-called critical minerals. In recent years, significant investments have been made in exploration and development projects involving rare earths, lithium, nickel and copper. For instance, the country hosts the only large-scale producer of critical heavy rare earths — as well as light rare earths — outside of Asia, and there are several other rare earth projects advancing to the development stage. Similarly, in the case of lithium, Brazil has three producing mines and a few other projects under development in the so-called Lithium Valley in the State of Minas Gerais.

All these opportunities in the mining sector attract the interest of potential investors across different types of commodities, project sizes, and stages of development. The following market insights provide a snapshot of the current landscape.

Policy for critical and strategic minerals

Brazil is well positioned to play a relevant role in the production of critical minerals. Besides having relevant resources and reserves of a number of those minerals, the country has not been involved in geopolitical conflicts and has a track record of being a reliable source of minerals.

However, there may be changes in some rules in the near future. The critical and strategic minerals policy law was established on September 16, 2026 and is in the process of being regulated. For the purposes of the policy, critical minerals are those essential to key sectors of the national economy whose availability is or could be at risk due to supply-chain vulnerabilities, while strategic minerals are those for which Brazil holds significant resources and reserves. This means that, in the definition of a list of minerals that will be subject to the policy, the federal government may include certain minerals that are not typically in lists of other countries, but that would be considered as strategic for Brazil.

The main drive of the policy is to increase governmental oversight over critical and strategic minerals projects as an exercise of national sovereignty, and to encourage further industrialization of those products in Brazil.

The law creates a National Council for the Industrialization of Critical and Strategic Minerals formed by representatives of 13 ministries, besides representatives from states, municipalities, industry and academia. With the Council, the Brazilian government envisions closer monitoring of projects involving these resources. Changes of control, acquisitions and transfers of mineral rights, strategic investment, as well as offtake or supply contracts involving critical and strategic minerals, shall be subject to government ratification (homologação). Beyond the additional bureaucratic step that government ratification would entail, the criteria for granting or denying such type of approval (with or without conditions) had not been determined by regulation at the time this article was prepared.

The law also provides for incentives to encourage exploration and mining of critical and strategic minerals, including tax credits, incentivized debentures and a fund to provide financial guarantees for priority projects involving critical and strategic minerals. However, only those operations that lead to industrialization and refining in Brazil (as opposed to the export of non-refined products) will be eligible for those incentives. In practical terms, the policy does not seem to provide for actions to increase the production of critical and strategic minerals in general, but only in those cases where the mineral production will be industrialized in the country. Moreover, instruments like priority for permitting critical minerals projects (which are frequently seen in other countries) have not been regulated so far.

As it currently stands, the policy may send mixed signals to the mining sector. On the one hand, it claims to attract investment and ensure legal certainty. On the other hand, it imposes a series of conditions on the development and operation of critical and strategic minerals, including government approval of certain transactions, which may add a layer of uncertainty. Although the creation of financing mechanisms and tax incentives for the exploration and mining of critical minerals may be a positive step, the new law risks undermining those very incentives by conditioning them on domestic processing and transformation, without critically assessing the economic and market conditions or Brazil’s competitiveness in this area. In the end, the regulations and their implementation will play an important role in determining how competitive Brazil can be in the arena of critical and strategic minerals.

M&A outlook

The mergers and acquisitions market in the mining sector has been active in Brazil. Critical minerals seem to have driven the major transactions involving mineral assets and companies, while high gold prices also contributed to deals involving those assets. Likewise, the aggregates and cement industries attracted buyer interest, supported by the continuous growth of the Brazilian economy at steady (although not spectacular) rates. Notably, both projects and operating assets were the subject of several transactions, indicating that buyers were not only seeking access to producing assets but also aiming to gain control over new sources of minerals — a trend reflecting efforts to secure long-term supply in a jurisdiction historically considered stable and reliable.

Although some of the M&A transactions were specifically targeted at Brazilian assets, others involved multijurisdictional transactions that had a Brazilian component. This seems to reflect the general concern of global transactions driven by security of supply of minerals — particularly critical minerals, the lists of which keep growing — alongside business decisions that are more oriented by policy considerations.

One noticeable trend is the increasing presence of Chinese players in the Brazilian mining sector. In the last couple of years, there were at least six major acquisitions involving different Chinese buyers, most of whom did not have a major presence in the Brazilian market. The assets involved in those transactions were diverse, including copper, nickel, tin, aluminum, gold, and aggregates for civil construction.

Financing

Financing for mineral exploration and development is hardly available in Brazil. Although capital markets are sizeable and sophisticated, there is not a tradition of investing in mining, especially in earlier stages of a project. For that reason, it is more common that Brazilian companies raise capital in more traditional mining markets, such as Toronto, London or Australia.

Likewise, debt financing tends to be contracted with international banks, while Brazilian banks usually play a role as guarantors to development or producing mines. Project finance in general tends to be made internationally. Export credit agencies of some countries are already involved in certain projects in Brazil, as well as the United States Development Finance Corporation (DFC). In some cases, given the pressure to secure access to minerals, offtakers are structuring their contracts in the form of financing the mining company, which in turn will commit to supply (part of) the output to the offtaker.

Finally, royalties still play a relevant role in terms of early financing, as well as some streaming transactions involving Brazilian assets.

More recently, given the global changes in the mining sector, other alternatives are being developed in Brazil. A number of funds and private equity houses, which usually would not consider investing in the mining sector, have established dedicated teams to identify opportunities in mining. Moreover, the National Social and Economic Development Bank (BNDES) launched a fund together with Vale and other players to invest in late-stage exploration and development projects of critical and strategic minerals. The fund is expected to have at least USD 200 million, and its implementation is set to be concluded in late 2026.

In addition, BNDES also launched a call for projects of mineral transformation, including refining and metallurgy. More than 100 interested parties submitted their proposals, and 56 projects were selected for investment of up to USD 8.5 billion. These initiatives of the BNDES reflect a governmental policy to seek the development of other chains of the production process in the country.

Institutional challenges

Perhaps one of the main challenges of the mining sector in Brazil is to navigate through the various layers of authorities and institutions in the country. Mineral rights are granted at the federal level, but some of the other permits, particularly the environmental permits, are generally granted at the state level. The dialogue among all the entities that are involved in a mining project is not always clear and direct, so the time lag for permitting may increase significantly due to such inefficiencies.

Moreover, the National Mining Agency (ANM), which is the federal body in charge of regulating the mining activity, granting mineral rights, and supervising exploration and mining, still faces significant administrative constraints. The Agency is understaffed, has significant portions of its budget withheld by the federal government, and does not have adequate systems and procedures in place. There were recent investigations into corruption that also undermined the Agency.

This scenario may change in the future, with some planned investment in artificial intelligence (AI) tools and new systems, hiring and training personnel, and getting funds actually transferred from the central government to the Agency. Yet, mining companies should account for procedures within the Agency that tend to be more time-consuming than expected.

Final remarks

Brazil presents a compelling opportunity for investors in the mining sector, combining substantial geological endowment with a diverse portfolio of mineral resources — from traditional commodities like iron ore and gold to critical minerals such as rare earths, lithium, nickel and copper. The country’s position outside of geopolitical conflicts, its track record as a reliable supplier, and ongoing investments in exploration and development underscore its potential as a key player in the global supply chain for critical minerals.

From an M&A perspective, the sector remains active, with critical minerals and gold driving major transactions and an increasing presence of international players — including Chinese investors — seeking to secure long-term supply. While traditional financing for exploration and development remains limited domestically, new alternatives are emerging, including dedicated mining funds, BNDES initiatives, and offtake-financing structures. At the same time, investors must be prepared for the institutional challenges inherent in Brazil’s multi-layered permitting system and the administrative constraints facing the ANM, as well as the recent approval and upcoming implementation of the National Policy for Critical and Strategic Minerals. In that respect, more governmental scrutiny should be expected. Despite these hurdles, the combination of potential resources, evolving financing options, and Brazil’s strategic importance in the global minerals landscape makes the country a jurisdiction worth watching closely.