Strategic minerals for the energy transition

The Ministry of Mines and Energy (MME) is facilitating the implementation of a National Policy for Critical and Strategic Minerals (PNMCE). The policy aims to expand geological knowledge and mineral research, strengthen national production and processing, integrate base productive chains, reduce external vulnerability regarding the import of essential minerals, and ensure Brazil’s sovereignty and competitive autonomy in the context of the energy and technological transition.

The policy’s guidelines aim to promote sustainable socioeconomic development, with the responsible use of natural resources and respect for human rights, ensuring the mitigation of socio-environmental risks from the initial stages of projects. The policy seeks to prioritize the analysis and approval of strategic projects within public administration, strengthen geological knowledge, stimulate research, innovation, and the training of specialized labor, as well as enable the financial support and infrastructure necessary for the expansion of mining and mineral processing.

It also emphasizes federal and social dialogue, international partnership for market access and technology transfer, strengthening of national productive chains, and the creation of a regulatory and tax environment favorable to investment, while always preserving national interest and sovereignty.

HIGHLIGHTS IN THE GLOBAL RANKING

With the advancement of global efforts for the energy transition, one of the main opportunities opening up for Brazil consists of the responsible exploitation of strategic minerals for the energy transition.

Brazil has very significant known reserves, occupying the following positions in the global ranking: niobium (1st), graphite and rare earths (2nd), nickel (3rd), manganese (4th), vanadium and bauxite (5th), lithium (6th), and cobalt (9th). The niobium reserves alone account for 89.91% of the planet’s total.

The International Energy Agency (IEA) defines the following as essential minerals for the energy transition: lithium, graphite, nickel, copper, cobalt, and rare earth elements. These are natural resources used in the production of batteries and electric vehicle components, as well as in wind turbines and solar panels, among other applications in clean and renewable energy sources.

The transition towards cleaner and more sustainable energy sources will result in significant growth in the demand for strategic minerals on a global scale. As pointed out by studies from the International Energy Agency (IEA), in the scenario of net-zero emissions by 2050, the international demand for lithium is expected to be nine times higher, while demand for graphite is expected to almost triple.

Brazil has at least 50 mineral projects for the energy transition underway, distributed between pre-operational phases and the extraction phase, with planned investments exceeding US$ 18 billion. There is a good supply of qualified higher-level labor, as well as centers of excellence in research and development in the area of mining and mineral processing.

STRATEGIC MINERALS EQUITY INVESTMENT FUND (FIP)

The National Bank for Economic and Social Development (BNDES) and the MME launched the Strategic Minerals Equity Investment Fund (FIP) to mobilize R$ 1 billion in business projects for the energy transition, decarbonization, and sustainable food production.

Investments prioritize the following strategic minerals: cobalt, copper, tin, graphite, lithium, manganese, platinum group metals, molybdenum, niobium, nickel, silicon, tantalum, rare earths, titanium, tungsten, uranium, vanadium, zinc, phosphate, potassium, or others for promoting soil fertility and essential for food security.

The plan is for the resources to benefit 15 to 20 companies in initiatives for mineral research, development, and exploitation of new mines in Brazil. BNDES will contribute up to R$ 250 million to the FIP, with a participation of up to 25% of the total, and Vale will contribute another 25%, with other national and international investors expected. The capital can be used by junior and medium-sized companies.

With its vast territory, geological diversity, and soil richness, Brazil seeks to maintain its world leadership in the energy transition. The FIP has the potential to leverage the sector and attract even more investment to the strategic minerals chain, helping smaller companies access the market.

These actions contribute to harnessing the country’s vast potential, allowing it to position itself as a supplier of strategic minerals to meet global demand for clean energy technologies.

The FIP seeks to stimulate a new cycle of fostering the production of strategic minerals, focusing on innovation and sustainability – pillars of the New Industry Brazil and the More Production Plan of the Federal Government.

According to BNDES, another objective is to stimulate companies to adopt ESG practices, so they can generate a positive impact for local communities and minimize the environmental impacts of projects.

In this sense, actions for training labor and local suppliers, regularizing the rural environmental registry (CAR) and recovering vegetation in affected areas, and efficient management of water and waste are encouraged, in addition to practices of transparency and proper relationship with local communities.

Technologies for decarbonizing the planet and containing global warming require enormous quantities of minerals. The expansion of the fleet of hybrid or electric vehicles and the increase in electricity generation from solar and wind sources depend on a rapid and exponential expansion in battery production.

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