By Marco Aurélio Neves
June 18, 2026

High-purity iron ore is not expected to receive tax incentives if it is classified as a strategic mineral under Brazil’s National Policy on Critical and Strategic Minerals (PNMCE), according to federal government sources interviewed by O TEMPO. The PNMCE is expected to be established through Bill No. 2780/2024, which is currently under consideration by the Brazilian Federal Senate.

The possible inclusion of high-grade iron ore in the National Policy on Critical and Strategic Minerals has generated considerable debate within the mining industry, with both supporters and opponents. Junior mining companies focused on critical minerals fear that funding and investment resources could be diverted to large iron ore producers, including access to special financing programs offered by the Brazilian Development Bank (BNDES).

Another sensitive issue for the industry concerns the authority of the National Council for the Industrialization of Critical and Strategic Minerals (CIMCE), a body proposed under Bill 2780 to regulate the PNMCE. Among the council’s potential responsibilities is the approval of corporate transactions involving strategic mineral companies, a measure that could affect mergers and acquisitions (M&A) involving major mining corporations.

According to government sources, the inclusion of high-grade iron ore in the National Policy on Critical and Strategic Minerals is intended to allow the use of regulatory instruments applicable to strategic minerals—particularly regarding environmental licensing—rather than providing tax incentives.

Whether the mineral is included in the policy immediately or at a later stage will ultimately depend on the CIMCE. The council will also determine which regulatory, tax, or financing instruments are appropriate for each mineral. In addition to creating a dedicated BNDES financing line for strategic minerals, the PNMCE also proposes allowing companies in the sector to issue tax-incentivized infrastructure bonds.

Brazil Iron: Classification Would Benefit Brazil

During the 3rd Brazil Lithium & Critical Minerals Summit 2026, held in Belo Horizonte and concluding on Friday (June 18), Brazil Iron’s Vice President of Institutional Relations, Emerson Souza, told O TEMPO that the objective of the PNMCE is to create initiatives that accelerate project development rather than divide the available investment pool.

According to the executive, granting access to tax-incentivized bonds for high-grade iron ore projects or streamlining environmental licensing—while maintaining the necessary social and environmental responsibility—would not undermine investment in other mineral sectors.

He emphasized that rare earth elements have their own strategic importance and will continue to play an essential role in global markets alongside other critical minerals.

“Including iron ore does not mean taking investment away from other sectors, because every sector is important, every one will require investment, and every one will continue to attract investment—as demonstrated by the number of investors interested in rare earth projects in Brazil, for example. I do not see one affecting the other.”

Souza also argued that classifying high-purity iron ore as a strategic mineral would be advantageous for Brazil. He cited Canada as an example, noting that the country already considers this type of ore strategic under a model that could be adapted to Brazil. He highlighted that only about 3% of the world’s iron ore is considered high-grade enough to support low-carbon steel production, and that a significant portion of these reserves is located in Brazil.

In addition, he referred to studies by McKinsey & Company, which project a global deficit of 109 million tonnes of high-grade iron ore by 2030, accompanied by rapidly growing international demand.

“We are talking about something that is not only scarce but also something that many people will want and there simply will not be enough for everyone. It fits the same profile as all the other strategic minerals we are discussing,” argued the Brazil Iron executive.

CEO of Cabo Verde Mining Warns About Oversight of Corporate Transactions

Túlio Rivadávia, CEO of Cabo Verde Mineração, acknowledged the urgency of establishing a national policy for critical minerals but expressed concern over granting the proposed council authority to approve corporate transactions involving mining companies.

Speaking to O TEMPO during the event on Friday, the executive said he doubts that one of Brazil’s largest export commodities—iron ore—will ultimately be included on a list of strategic minerals subject to oversight by a council empowered to approve corporate transactions.

“Especially high-grade iron ore. The companies capable of producing high-grade ore today are the major iron ore miners. Imagine if an M&A decision by Vale or one of its commercial strategies had to be approved by this Critical Minerals Council. That is simply never going to happen.”

Rivadávia also stated that he does not believe high-purity iron ore will ultimately be included in the PNMCE. If it is, he expects strong pressure from the mining industry to have the mineral removed from the strategic minerals list.

“I believe those most negatively affected by including high-grade iron ore on this list would not be the junior mining companies or the critical minerals sector, but rather the iron ore industry itself, which needs to continue advancing the technology required to produce direct reduction, high-purity, high-grade iron ore. It would actually hinder the iron ore market itself.”

Photo: Disclosure

Source: High-Grade Iron Ore Will Not Receive Tax Incentives if Classified as Strategic, Sources Say