Key insights
- Brazil's rejection of a state-run critical minerals firm and questioning of a state-level deal with the US signals potential headwinds for US companies seeking to diversify critical mineral supply chains. This could slightly negatively impact sectors reliant on these minerals, such as technology and electric vehicles, by increasing uncertainty around resource access.
SAO PAULO, April 24 (Reuters) - Brazil’s government sees no need to create a state-run company focused on critical minerals and believes a cooperation agreement inked by the state of Goias with the United States is unconstitutional, Industry Minister Marcio Elias Rosa said on Friday.
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Rosa pushed back against recent proposals from lawmakers to establish a state-backed entity dubbed Terrabras.
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"There is no need whatsoever to create a state-owned company to carry out the exploration or processing of critical minerals. The regulatory framework already provides several ways to incentivize this sector," he told TV Brasil.
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Rosa criticized a recent agreement signed between the Trump administration and Goias state on critical minerals.
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The deal included mapping mineral potential, connecting local miners with U.S. technology and improving regulations.
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"From a constitutional and legal standpoint, it does not hold up," Rosa said, adding that the authority to regulate and establish relations with other countries lies with the federal government.