The newly-founded Brazilian critical minerals association (AMC) will push to develop an integrated critical minerals supply chain in the country, AMC board president Marisa Cesar told Argus.
The AMC, a national association aiming to expedite the development of the Brazilian critical minerals industry, will work to eliminate the financial bottlenecks that prevent miners in Brazil from fully capitalizing on their production, Cesar said in an exclusive phone interview Wednesday.
Brazil is in a position to become the world's leading critical minerals player, she said, but it lacks the fiscal incentives to do so — which leads to other countries offering more favorable economics for midstream and downstream plants than Brazil.
"It is necessary to create tax exemption policies and extend fiscal benefits to critical minerals producers to make Brazil competitive compared with other locations," Cesar said. "We need to establish a public policy that facilitates moving further downstream here."
There are certain caveats in the Brazilian market that raise costs for mineral processing, she said. For example, there are some chemical components needed to process lithium that are not available in Brazil and must be imported, which drives up production costs.
Brazil lithium miners have long asked for federal incentives to help boost domestic demand, which would ultimately allow them to move further downstream.
"We obviously want to produce locally, but we need federal subsidies to help balance production costs and be more competitive," Cesar said.
Bringing midstream and downstream plants to Brazil is part of AMC's core business, which — among other goals — aims to help guarantee funding to junior miners and young producers seeking to expand on its assets in the country.
Juniors usually have trouble securing loans and credit lines because they do not have assets to put up as collateral, which is a problem that the AMC wants to solve.
"If we don't find a way for the junior miners to secure the funding they got from [Brazil's development bank] Bndes, we will not be able to bring an integrated supply chain to Brazil," Cesar said at AMC's inauguration event in Brasilia on 25 November, noting that what companies "want the most" is to have control of the entire production chain.
Earlier this week, Brazilian President Luiz Inacio Lula da Silva said that foreign companies looking to extract Brazil's critical minerals would have to "industrialize production", and not just export the raw ore.
