Brazil’s mining potential is hindered by a lengthy licensing process, leading to reduced investment interest. Major miners could invest $68.4 billion by 2029 if regulations improve. The country has vast mineral resources but faces broader regulatory challenges in sectors like oil production.
Brazil’s potential for growth in the mining sector is impaired by excessive regulatory hurdles. Raul Jungmann, CEO of Ibram and former head of Brazil’s environmental agency, highlighted that the lengthy seven-to-eight-year licensing process is causing a downturn in investment interest. During a conference, he linked the country’s bureaucratic delays to a cooling effect on international investment opportunities.
Despite the promising global demand for critical minerals, Jungmann indicated that Brazil’s planned investments from major mining companies amount to $68.4 billion for the years 2025 to 2029. He noted that this figure could be elevated if Brazil’s permitting process was more efficient, pointing out that other nations approve mining licenses in about half the time.
Brazil possesses significant mineral reserves, including the largest niobium reserves and the second-largest reserves of graphite and rare earth elements. Additionally, it is a leading producer of iron ore, largely due to companies like Vale SA. However, the stringent regulations affect not only mining but other industries, including the state-controlled oil producer, Petrobras.
Petrobras has faced regulatory challenges in obtaining drilling approval for the Foz do Amazonas basin since 2020. Magda Chambriard, CEO of Petrobras, reported that their difficulties stemmed more from environmental regulators, such as Ibama, than from the oil and gas regulatory bodies, which even halted operations on one of its production vessels.
Brazil’s mining sector faces significant investment barriers due to lengthy licensing processes, which may dampen international interest amid rising global demand for minerals. Streamlining these regulatory hurdles could potentially increase projected investments. The broader implications of strict regulations extend to other sectors, including oil production, indicating a pervasive trend affecting Brazil’s economic growth efforts.
Original Source: www.mining.com
