Government releases rules allowing bond issuance for strategic mineral projects | Brazil

This bill would regulate bond policy for strategic mineral conversion projects for the energy transition, with the aim of attracting private investment, stimulating value addition, and strengthening the mineral conversion industry.

According to the regulations, up to 49% of the procured resources can be allocated to the mining and mine development phase, as long as they are related to mineral conversion projects. The estimated total investment is R$5.2 billion per year, with R$3.7 billion for mineral conversion and R$1.5 billion for mining and processing.

The government, through ordinances, cobalt, copper, lithium, nickel and elements rare earth As strategic minerals for the energy transition, they are therefore eligible for tax-advantaged corporate bonds, incentivized corporate bonds, or infrastructure issuance.

MME notes that among the potential projects that could benefit are nickel and cobalt sulphate projects in São Paulo and Pará states, and a lithium carbonate plant in Minas Gerais, which Pasta has identified as the basis for the development of a battery and energy storage chain.

The ordinance exempts projects from pre-approval and limits tax benefits to an amount equal to the capital expenditure of the investment project. However, the issuer must submit an application for registration of a public offer of value with tax benefits to the MME, accompanied by a set of information for monitoring and inspection.

Also this Friday, the Ministry Basic reference material on sustainable Brazilian miningaimed at guiding principles and parameters for the development of this segment in Brazil.

According to the MME, its aim is to establish guidelines structured around environmental, social and governance axes (ESG), informing public policies, programs and measures to promote sustainable mining. For public consultation, National Sustainable Mining Program.