Brazil’s Licensing Process Deters Investment in Mining Sector

Brazil’s complex licensing process is hindering investment in the mining sector, according to Raul Jungmann of Ibram. He highlighted that a streamlined permit process could increase anticipated investments of $68.4 billion between 2025 and 2029. Brazil possesses major mineral reserves but lags in approval times compared to other countries. Regulatory challenges also affect the oil sector, with Petrobras facing delays from environmental regulators.

Brazil is poised to benefit from the rising global demand for critical minerals; however, its complex licensing process is stifling development. Raul Jungmann, the CEO of Ibram and former head of Brazil’s environmental agency, noted that the lengthy seven-to-eight-year wait for mineral project licenses is detrimental to investment interest. Speaking at the Brazilian Development Bank’s strategic minerals conference, he emphasized that streamlining the permitting process could substantially increase investment levels, which are projected at $68.4 billion from major miners between 2025 and 2029.

Jungmann highlighted Brazil’s significant mineral reserves, including the largest niobium holdings, the second-largest graphite deposits, and considerable reserves of rare earth elements and nickel. Despite these advantages, the protracted approval times for licenses lag behind other countries, which typically complete the process in a fraction of the time.

Additionally, the mining industry’s concerns are echoed across other sectors. For instance, Petrobras, Brazil’s state-controlled oil company, has been seeking approval to commence drilling in the Foz do Amazonas basin since 2020, facing significant regulatory challenges. CEO Magda Chambriard recently remarked that the company is encountering greater impediments with Ibama than with the gas and oil regulatory body, which has even halted operations of one of its production vessels during this period.

Brazil’s substantial reserves and the global demand for minerals present a significant opportunity for economic growth. However, the overly stringent and prolonged licensing process is deterring vital investments that could elevate these resources to their full potential. Streamlining this process will be crucial in attracting investment and accelerating the development of Brazil’s vast mineral wealth.

Original Source: www.mining.com