Brazil’s lengthy mineral licensing process is hindering investment, according to Ibram’s CEO Raul Jungmann. Major miners plan to invest $68.4 billion from 2025-2029, a figure that could rise if licensing is streamlined. Brazil possesses significant mineral reserves but faces regulatory challenges, exemplified by Petrobras’s difficulties in obtaining drilling approvals.
Brazil’s burgeoning demand for critical minerals has the potential to greatly benefit its economy; however, the lengthy and complex licensing process is thwarting this opportunity. Raul Jungmann, the chief executive officer of Ibram, highlighted during a mining conference in Rio de Janeiro that the current wait time of seven to eight years to obtain necessary permits severely diminishes investor interest.
Furthermore, Jungmann pointed out that if Brazil could streamline its permitting process, the projected investment from major mining corporations could exceed the estimated $68.4 billion slated for 2025 to 2029. In comparison, other nations typically achieve permit approvals in half the time or less than what Brazil currently requires.
Brazil is notable for possessing immense reserves of vital minerals, including the largest niobium reserves globally, alongside significant graphite and rare earth element reserves. The country is also a leading producer of iron ore and is home to major mining company Vale SA.
Despite these advantages, Brazil’s stringent environmental and safety regulations, enforced by independent regulators, may deter investment in various commodity sectors, including oil and gas. Petrobras, the state-controlled oil producer, exemplifies this challenge, as it continues to face regulatory hurdles, particularly with environmental agency Ibama, waiting since 2020 for drilling permissions in the Foz do Amazonas basin. CEO Magda Chambriard noted that regulatory challenges from Ibama have surpassed those from the oil and gas regulatory body.
In summary, while Brazil has the potential to capitalize on the rising global demand for critical minerals, its protracted licensing process hampers substantial investment. The need for regulatory reform is critical to enhancing Brazil’s attractiveness for mining investments, which could significantly impact the nation’s economic landscape. Revisiting permitting timelines could unlock additional opportunities within Brazil’s mining sector.
Original Source: www.mining.com
