Brazil’s Senate has approved a bill aimed at regulating the extraction and processing of critical minerals, including rare earths, which are essential components in modern technology such as smartphones, electric vehicles, and solar panels. The bill was strongly supported by the lower house of Congress on May 6 and now moves to President Luiz Inácio Lula da Silva, who is expected to sign it into law. The legislation seeks to establish a legal framework for the mining sector and includes financial incentives to promote domestic processing of these valuable resources. The proposed law introduces the Mineral Activity Guarantee Fund, which will be funded with 2 billion reais (approximately $391 million) from the federal government. This fund will support projects and activities related to the production of critical and strategic minerals. Additionally, the bill provides for 5 billion reais ($978 million) in tax credits over five years to encourage local processing of these minerals. A new National Council for the Industrialization of Critical and Strategic Minerals will also be created to identify priority projects for funding. Recent developments have highlighted growing international interest in Brazil’s rare earth resources. A joint analysis by the Associated Press and Reporter Brazil found that U.S. investment in Brazil’s rare earth sector has surged following China’s restrictions on rare earth exports last year. This shift was partly due to U.S. tariffs on Chinese goods, prompting China to limit its rare earth exports. In April, USA Rare Earth, a company with U.S. government involvement, agreed to purchase Serra Verde, Brazil’s only commercial rare earth producer, for about $2.8 billion. Serra Verde operates the Pela Ema mine and processing plant in Goias state. Environmental groups, including Brazil’s largest network of environmental organizations, the Climate Observatory, have raised concerns about the bill. They argue that it may weaken regulations without addressing potential economic, climate, or social consequences. Meanwhile, experts like Leonardo Paz Neves, an international relations professor at the Getulio Vargas Foundation, emphasize the need for public discussion on the exploration and production of Brazil’s natural resources. President Lula has also indicated that Brazil is engaging with multiple countries beyond the U.S., including India, which signed a nonbinding memorandum of understanding with Brazil in February to enhance cooperation on critical minerals and rare earths.