Brazil’s Rare Earths Law Is Signed, but the Rules Are Still Missing

Brazil now has a critical minerals law, but the investment case is not settled. Law 15.506/2026 was signed on 16 September 2026, and as of today the council that decides which rare earth projects in Brazil qualify for state support has not published a mineral list or a National Plan.

That gap matters because the geology is not in question. Brazil holds about 21 Mt of rare earth reserves, second only to China, yet it mined only around 2,000 t in 2025, roughly 0.5% of global output.

At a panel in Brasília yesterday, executives from the country’s mining industry described what it would take to close that distance. Their answers pointed less at drill results and more at Brasília’s regulatory calendar.

Here is where the policy risk sits, where the opportunity sits, and which signals tell you how the balance is shifting.

Why does CIMCE sit at the centre of Brazil’s rare earths opportunity?

The law’s ambitions are large. It creates the National Policy on Critical and Strategic Minerals (PNMCE), which aims to process minerals in Brazil rather than export them raw. It also arrives with money attached.

The Mineral Activity Guarantee Fund (FGAM) carries up to R$2 billion in initial federal participation. A federal processing and transformation programme (PFMCE) adds R$5 billion for beneficiation incentives. A national project registry (CNPMCE) and a Low-Carbon Mineral Certificate complete the toolkit.

Every one of those instruments runs through the same door.

That door is the National Council for the Industrialisation of Critical and Strategic Minerals (CIMCE). The law began as Bill 2,780/2024, cleared the Chamber of Deputies in May 2026 and the Senate in early September 2026. Decree 13,118/2026 then set up the council with 18 voting members: 13 federal representatives, one each from the states and municipalities, two from the private sector and one from academia. Some law firm commentary refers to “up to 15” federal bodies, but the decree figure of 13 is the more specific.

The law firms read the structure consistently. Mayer Brown calls it a new layer of strategic oversight, Demarest an extra gatekeeping step, and TozziniFreire says investors need clarity on classification and priority criteria. The council also sits alongside the National Mining Agency (ANM), and the two roles will need harmonising to avoid jurisdictional delays.

The waiting problem Frederico Bedran of the Critical Minerals Association (AMC) warned that a regulation period of roughly one to one and a half years could leave investors waiting too long, with some deals reportedly already affected. He called for a clear benchmark on which operations need council review, plus transition mechanisms so negotiations can continue.

What is still undefined

Three gaps stand between the statute and a working regime:

• The mineral list: until it exists, you cannot confirm whether a project’s target minerals qualify for incentives.
• The National Plan: without it, priority criteria remain unknown, which stalls decisions on where to commit development capital.
• Fund operating rules: FGAM, PFMCE and CNPMCE have no published procedures, so financing models cannot yet assume their support.

For you as an investor, the practical meaning is that deal timelines now depend on a body whose rules do not exist yet. Early legal structuring and engagement with authorities carry real value in that environment.

What does it take to build a mine-to-magnet chain outside China?

“Mine to magnet” sounds like a single project. It is really five businesses stacked on top of each other, and each layer adds cost, technology risk and a need for a buyer.

1. Mining: extracting ore, which Brazil already does at modest scale.
2. Beneficiation: concentrating the ore, a capital-intensive step sensitive to impurities.
3. Separation: splitting the mixed product into individual oxides. Heavy rare earths such as dysprosium (Dy) and terbium (Tb) require solvent extraction or similar processes with high energy and reagent costs, making this the choke point.
4. Metallisation: converting oxides into metals and alloys, a stage few countries outside China operate.
5. Magnet and motor manufacturing: the final product, which depends on long-term offtake with carmakers and turbine builders.

Today, Brazil’s only commercial producer is Serra Verde’s Pela Ema mine in Goiás, which has sold a mixed carbonate since January 2024 and targets 6,400-6,500 t a year by end-2027. That puts the country firmly at stages one and two.

Where the panelists said the bottlenecks sit

Júlio Nery of the Brazilian Mining Institute (IBRAM) said an industrial policy is needed to create domestic demand for each stage. He named bottlenecks in financing, environmental licensing, infrastructure and technology, adding that pre-production companies struggle to raise funds and research institutions need more backing for separation technology. He also argued copper belongs in the strategy, and IBRAM wants the critical minerals list prioritised.

José Augusto Palma of Aclara Resources set out the sequence: mining progress first, then suppliers, workforce training, technology and links to consumer markets. Competing with the country that dominates separation, he said, will take time.

Price volatility, much of it driven by Chinese export policy, makes standalone separated-oxide plants risky. Long-term offtake is what makes them financeable. No rare earth-specific funding announcements from Brazil’s development banks BNDES or Finep were identified, leaving FGAM and PFMCE as the main named channels.

Price volatility compounds the problem, since midstream processing economics depend heavily on utilisation rates and secured offtake, which is why standalone separated-oxide plants struggle to attract financing without long-term buyers.

Every non-Chinese chain still leans on policy support. The read you should take is that Brazil’s realistic near-term role is upstream mining and first-stage processing, with downstream capacity built in stages, so value projects on the stage they occupy rather than on a full domestic chain.

What does Aclara’s Carina project show about the staged route?

Carina is where that staged logic meets real numbers. The ionic clay deposit near Nova Roma, Goiás, is 100% owned by Aclara and carries strong dysprosium and terbium content, the heavy rare earths that permanent magnets need most. Ionic clay deposits hold rare earths loosely on clay particles, which makes them easier to process than hard rock, though they still require sophisticated separation.

The Feasibility Study filed on 13 April 2026 sets out the economics:

• Reserves of 170.8 Mt at 1,745 ppm total rare earth oxides (TREO)
• After-tax NPV8 of US$1.7 billion, meaning the project’s value after tax using an 8% discount rate
• An 18-year mine life and IRR above 22%
• Average annual output of about 4,265-4,378 t TREO, including 149 t Dy, 26 t Tb and 1,170 t NdPr

The study did not identify a capital cost figure in the research available, so the full return picture remains incomplete.

The processing plan follows the staged model. A first-stage separation step in Brazil would produce a high-purity rare earth carbonate, with downstream separation and metals handled at Project Dynamo in Louisiana. A pilot plant in Aparecida de Goiânia validated the leaching and separation flowsheets in 2025 using Aclara’s Circular Mineral Harvesting technology, and the environmental impact study went to the Goiás environmental secretariat (SEMAD) in May 2025.

Aclara’s schedule targets:

1. Early works from Q3 2026
2. Construction from Q1 2027
3. Commercial production in H2 2028, ahead of an earlier indication of around 2030

The investor condition Palma, speaking for Aclara, named predictability and legal certainty as the core conditions for private investment to continue.

That timing is the point. A project this advanced is exactly the kind CIMCE qualification will test first, so how Carina is treated offers you an early read on how predictable the new regime will prove.

Production targets and schedules are company forecasts and are subject to permitting, financing and market conditions.

For readers wanting to understand Aclara’s capital strategy, our detailed coverage of Aclara’s Carina strategy explains why the company kept its Brazilian asset outside the JOGMEC partnership.

Does state oversight help or hinder Brazil’s rare earths ambitions?

President Lula framed the law around national sovereignty and incentives for domestic processing. That framing invites two fair readings.

Demand gives the supporters weight. Permanent-magnet motors in EVs and direct-drive wind turbines, plus US and EU sourcing frameworks, reward non-Chinese heavy rare earth supply. The clause requiring CIMCE approval of international agreements affecting economic or geopolitical security signals that Brazil wants a say in where that supply goes.

Bedran’s counterweight is practical: state control must come with predictability, because with dozens of projects in the pipeline the council cannot become a bottleneck.

The policy trades speed for strategic alignment. That trade only works in your favour if the rules arrive clearly and on time, which these signposts will reveal:

• Publication of the critical minerals list
• Release of the National Plan
• Operating rules for FGAM and PFMCE
• A clear review benchmark for shareholding changes

Reading the near-term signals for Brazil’s rare earths

Legal certainty is the gating variable. Nery wants priority minerals defined and long-term investment conditions in place, Bedran wants financing and incentives for refining and metallisation, and Palma wants predictability. Each points at the same sequence of regulatory deliverables.

That gives you a practical checklist for the coming months: the CIMCE mineral list, the National Plan, the fund operating rules, and Carina’s licences ahead of its planned Q1 2027 construction start. If those land on time, the opportunity case strengthens; if they slip, the waiting cost Bedran described becomes the dominant risk.

This article is for informational purposes only and should not be considered financial advice. Investors should conduct their own research and consult with financial professionals before making investment decisions. Past performance does not guarantee future results, and forward-looking statements are speculative and subject to change.