Brazil’s Licensing Delays Deter Investment in Mining Sector

Brazil’s extensive licensing process is suppressing investment in its mining sector, states Ibram’s CEO Raul Jungmann. The anticipated influx of $68.4 billion in mining investments from 2025 to 2029 could be enhanced with a more efficient permitting process. Brazil is rich in critical minerals but faces tougher regulatory hurdles than other nations.

The increasing global demand for critical minerals presents a significant opportunity for Brazil; however, the protracted licensing process is hindering progress. Raul Jungmann, CEO of Brazil’s largest mining industry group, Ibram, highlighted this issue at a strategic minerals conference, noting that the lengthy seven-to-eight-year wait for mineral project licenses is “cooling” investor interest.

Investments from major mining companies in Brazil are projected to reach $68.4 billion between 2025 and 2029, a figure which could be enhanced with a more efficient permitting process. Jungmann pointed out that other nations often complete similar approvals in half the time taken by Brazil.

Brazil is exceptionally rich in mineral resources, holding the largest niobium reserves and the second-largest graphite reserves globally, along with significant amounts of rare earth elements and nickel. Additionally, Brazil is a leading producer of iron ore, with notable players in the sector such as Vale SA.

Moreover, it is important to note that Brazil’s regulators enforce more stringent environmental and safety standards compared to other regions. Challenges are not limited to mining alone; Brazil’s state-controlled oil company, Petrobras, has faced delays as well, with ongoing issues in securing drilling approvals since 2020. CEO Magda Chambriard indicated that Petrobras is experiencing increased regulatory challenges with environmental agency Ibama, even surpassing those faced from oil and gas regulatory bodies.

In summary, while Brazil has the potential for significant investment in its mining sector due to its rich mineral resources, the lengthy licensing process significantly deters potential investors. Streamlining these processes could maximize Brazil’s investment potential and positively influence its mining industry.

Original Source: www.mining.com