BNDES Critical Minerals Fund to Invest R$1 Billion

The Brazilian Development Bank (BNDES) has taken a significant step toward boosting Brazil’s strategic mineral industry by launching the Critical Minerals Fund. This initiative, supported by the Ministry of Mines and Energy (MME), aims to foster research, development, and operational projects that focus on critical minerals essential for the energy transition and food security. With a projected investment of over R$1 billion, this initiative highlights the importance of developing Brazil’s mineral resources to meet global and domestic needs for sustainable energy and agricultural productivity.

A Strategic Focus for Brazil’s Energy and Food Sectors

As the first Investment Fund in Participations (FIP) launched by BNDES with a focus on mining, the Critical Minerals Fund seeks to attract additional investors to support junior and mid-sized companies involved in mineral exploration and development. The fund is particularly focused on minerals critical for energy transition technologies and agricultural fertilizers—both of which are key priorities for the Brazilian government. These investments are expected to support the mining of minerals like lithium, cobalt, copper, graphite, and rare earth elements, which are essential for developing clean energy technologies like batteries and renewable energy systems.

Beyond energy, the fund will also support the mining of phosphates, potassium, and other soil remineralizers, which are crucial for ensuring soil fertility and improving food security.

Expanding Brazil’s Mineral Industry

The Critical Minerals Fund is anticipated to mobilize investments in up to twenty companies in Brazil, starting in March 2025. The fund will be managed by Ore Investments and JGP BB Asset, two experienced asset managers with a track record of success in resource management. By focusing on strategic minerals, the fund will bolster Brazil’s position as a key player in the global energy transition, especially as demand for critical minerals grows due to the rise of electric vehicles, renewable energy infrastructure, and decarbonization efforts.

Brazil’s potential in this sector is vast. As highlighted by the National Secretary of Geology, Mining, and Mineral Transformation, Vitor Saback, Brazil holds significant reserves of critical minerals. The launch of the fund provides a timely opportunity for expanding both production and business opportunities, while also driving local development in regions where mining activities are set to take place. Investments in the mineral sector will create jobs, stimulate economic growth, and contribute to Brazil’s leadership in sustainable development.

Minerals for the Future

The fund’s primary focus on minerals essential for the energy transition underscores its long-term vision of sustainability and global impact. Among the minerals prioritized are those critical for battery production, such as lithium, cobalt, and nickel, along with rare earth elements and others crucial for renewable energy technologies like solar panels and wind turbines. Additionally, the inclusion of uranium and vanadium supports the development of nuclear energy, another key part of the global energy mix.

For agriculture, minerals such as phosphate and potassium are critical components in fertilizers, which are necessary to maintain the fertility of Brazilian farmlands, a major pillar of the country’s economy. With increasing demand for food production globally, ensuring soil health will be crucial in supporting global food security.

Conclusion

The launch of the Critical Minerals Fund by BNDES marks a pivotal moment for Brazil’s mining and energy sectors. By investing in companies focused on the exploration and development of minerals critical for the energy transition and agriculture, Brazil is positioning itself as a key supplier of the materials needed to meet the challenges of the future. The initiative not only supports the country’s energy transition and decarbonization efforts but also promises to strengthen Brazil’s economy by creating jobs, driving innovation, and enhancing its role in global sustainability efforts.