The government of President Luiz Inácio Lula da Silva (PT) is evaluating the possibility of proposing an export tax on the gross sale of critical minerals, in yet another front of internal debate on how to stimulate value addition in the country.
The measure is among the alternatives discussed by government members in the context of formulating national policy for the sector.
The idea is to make the export of ore in a “raw” state less attractive and, at the same time, induce investments in the processing, refining and industrialization stages within Brazil.
It is important to highlight that, today, a large part of Brazil’s mineral exports already occur with some degree of industrial processing and transformation. The country already produces goods that reach the final stages of the mineral industry, such as metallic products, chemicals or higher purity compounds.
After that, depending on the mineral, these products start to supply other industries, such as steel, technology, energy, defense, batteries, magnets, semiconductors and highly complex equipment.
In the opinion of a source heard by CNN, the expression “raw ore” should be understood, in practice, as the mineral material still in the initial stages of the chain, and not as the metal already produced.
This group would include, for example, concentrates of iron minerals, such as magnetite and hematite; from copper minerals such as chalcopyrite and bornite; bauxite, in the case of the aluminum chain; and rare earth-bearing minerals such as monazite and xenotime. All these materials, when exported, undergo processing, but have not yet been subjected to metallurgical and chemical processes that generate products of greater purity and greater added value.
The logic, according to these sources, would be to tax the export of material closest to its original state, and not intermediate or already processed products, which occupy more advanced stages of the chain.
The topic appears amid internal disagreements about what the level of State intervention should be in the critical minerals chain.
As CNN showed, the proposal to create a state-owned company for the sector has lost strength in the government and is facing resistance from the majority of ministries involved in the discussion, at least at this moment. The matter remains until 2027, in the event of the president’s re-election.
Faced with this scenario, interlocutors began to discuss solutions considered more viable from a political and economic point of view.
Among them are precisely mechanisms to encourage value addition in the country, such as credit lines from BNDES (National Bank for Economic and Social Development) for processing and processing projects, as well as models in which the bank can participate as a partner in ventures.
The eventual creation of an export tax on the gross sale of minerals fits this logic.
Government members assess that the instrument could act as a disincentive to the simple shipment of raw materials abroad, reinforcing the strategy of developing more profitable stages of the mineral chain in Brazil.
However, no decision has been made. The discussion is still in a preliminary phase and depends on a broader technical and political assessment, including the impact of the measure on the sector’s competitiveness and investment attractiveness.
The debate takes place in parallel with the final stretch of discussions on the national policy for critical minerals and on the suggestions that the government intends to present to the text reported by deputy Arnaldo Jardim (Cidadania-SP) in the Chamber of Deputies.
The rapporteur, who has already presented a preliminary version of the text, made it clear that there is no space, within the National Congress, for proposals such as the creation of a new state-owned company or the restriction of exports, ideas defended by a minority wing of the government, but with influence with the president.
However, the legal framework, which will define the incentive framework for the sector in the coming years, must follow a line more focused on attracting international investments and opening up the market.
The report should provide for the creation of a federal mineral transformation program, with incentives aimed at the most advanced stages of the production chain.
According to Jardim, the proposal should differentiate projects according to the level of value addition, with greater benefits for those that advance further along the stages of the production chain.
The logic, according to the rapporteur, is to reward those who go beyond mineral extraction, so that, the greater the degree of transformation, the greater the incentives provided for in the legal framework.
