The rapporteur of the National Policy for Critical and Strategic Minerals, deputy Arnaldo Jardim (Cidadania-SP), will include in his final report the obligation for mining companies to apply a percentage of gross revenue to research, development and innovation activities in Brazil.
The proposal under discussion foresees that the resources will be allocated to the technological strengthening of the mineral chain, with a focus on research, mining, processing, mineral transformation and value addition in the country.
According to interlocutors who follow the negotiations, the percentage suggested by the rapporteur is 0.5% of gross revenue. The federal government, however, is working to raise this level to 1%.
The difference became one of the points of dispute in the final stretch of writing the report.
Members of the private sector argue that the percentage should not exceed 0.5%, arguing that a higher rate would increase companies’ costs in an already capital-intensive sector.
Mining companies also argue that the obligation does not apply to the companies’ gross revenue, but to a calculation basis calculated after paying taxes and mandatory deductions.
The sector’s assessment is that gross revenue does not represent the companies’ real investment capacity, as it considers total revenue before the incidence of taxes, charges, operational costs, logistical expenses, royalties and CFEM (Financial Compensation for Mineral Exploration).
On the government side, the assessment is that the critical minerals policy needs to create concrete instruments to finance innovation, applied research and technological dominance in Brazil.
The idea is to prevent the country from remaining focused solely on mineral extraction and moving forward in higher value-added stages of the chain.
The discussion takes place amid a broader clash between the government, Congress and the private sector over the design of national policy. The government has already lost strength on other fronts considered more interventionist, such as restrictions on the export of critical minerals.
Even so, it must still insist on increasing the percentage allocated to R&D. It is not yet defined where the resources will be directed.
Mining companies argue that the percentage can be applied to their own R&D and innovation projects within companies.
In the sector’s view, this would allow direct financing of activities such as mineral research, geological studies, development of technological routes, processing tests, mineral transformation, operational efficiency, emissions reduction, reuse of waste and new technologies linked to the production of critical minerals.
This alternative is seen by companies as the most efficient, because it would keep resources linked to each company’s projects and technological challenges.
The government, however, views this proposal with resistance. The assessment of interlocutors involved in the negotiation is that allowing compliance with the obligation only with internal investments could undermine the practical effect of the measure.
According to this reading, mining companies already need to invest in research, technological development and operational innovation to make their own projects viable. Therefore, members of the government argue that the rule creates an additional obligation to invest in R&D in the country, and not just recognize as public policy expenses that companies would already naturally make within their business plans.
A majority wing of the government defends that part of the resources be directed to the Mineral Sector Fund, an instrument aimed at financing scientific research, technological development and innovation related to mining.
The logic would be to use the revenue to strengthen universities, research centers, technological institutes and projects of public interest linked to the mineral chain.
Another possibility reported by interlocutors is the creation of a new specific fund for critical and strategic minerals.
In this model, the resources would be managed by a qualified institution, with its own governance and a manager hired to select research, innovation and technological development projects.
The creation of a separate fund is defended by government members as a way of ensuring that resources are used in a manner directed towards the new policy, without being lost within existing structures.
The discussion on R&D adds to other instruments foreseen in Jardim’s report, such as the creation of a national registry of critical and strategic mineral projects, the structuring of a guarantee fund for the mineral sector, tax and credit incentives, as well as mechanisms to stimulate mineral processing and transformation in Brazil.
The policy seeks to organize a national strategy for minerals considered essential to the energy transition, electric mobility, the defense industry, fertilizer production and the country’s economic security.
The final report must be presented by Jardim next Monday (4). The federal government is still working on final suggestions to the rapporteur on the proposal.
