Brasilia, June 11th (Argus) - Market participants estimate that although Brazil has been promoting the increase of key mineral production capacity, the country is still far from processing these key minerals domestically.
Since at least last November, Brazilian President Lula has been supporting the processing of key minerals in Brazil. On May 7th, the Brazilian Chamber of Deputies approved a crucial mineral bill, aiming to provide incentives to miners who process and refine the minerals domestically, further enhancing the significance of key mineral processing.
Industry representatives at a seminar on critical minerals hosted by the National Institute of Mining (Ibram) in Brasilia, the capital of Brazil, stated that although vertical integration was discussed, Brazil is still far from achieving the level of large-scale processing.
The country's mining minister, Ana Paula Bittencourt, said: "We still cannot produce on a sufficient scale, and even cannot consider the next stage." She pointed out that the gap between reserves and output is still very large.
Due to the different definitions of key minerals by various parties, the data on Brazil's key mineral reserves varies slightly. According to the data from the Brazilian Ministry of Economy, Brazil holds 24-25% of the global key mineral reserves, but its production is less than 1%. Ibram stated that Brazil has 10% of the global key mineral reserves.
Bittencourt said that Brazil needs to accelerate the improvement of geological knowledge in order to strengthen the mining industry. This might attract the necessary factors for expansion, such as credit lines and capital.
Technical ability
Even if production increases, Brazil still needs to train its workforce in key mineral processing and develop technologies for handling different minerals. Each key mineral has its own distinct market characteristics and price cycles.
Bittencourt said: "We need technology and research to certify our workforce. We are looking for credit and financing mechanisms to support technological development and to advance the supply chain for each mineral."
The Brazilian miners are skilled at mining, but they lack the expertise in processing key minerals, especially rare earths.
"It is extremely difficult to find engineers capable of operating the rare earth magnet industry," researcher Fernando Landgraf said at another group meeting. The speakers at the meeting pointed out that China holds an absolute monopoly in this field. Brazil needs to develop this technology, but it cannot achieve this without an international partnership.
Legislative and operational bottlenecks
The "Minerals Bill", which aims to guide this industry, may face delays, despite the fact that the bill has been swiftly approved in the House of Representatives and has been submitted to the Senate.
Congressman Jose Silva and Arnaldo Jardim were the drafters and rapporteurs of the bill respectively. They expressed confidence that the bill would be passed in the Senate without major amendments, preferably before the October elections. However, a Senate official told Agence France-Presse during an industry conference on June 9th that no timetable for making a decision had been set.
Apart from the legislative bottlenecks, the personnel of the national mining agency ANM is approximately 60% short. According to its director-general, the agency's key mineral sector has only four employees. ANM is responsible for managing and ensuring the safe use of the country's mineral resources.
