Vale is taking mining policy straight into Brazil’s presidential campaign. This week, the company unveiled “Unlocking Brazil’s Mining Potential,” a 15-point agenda that will be presented to presidential candidates. The proposals range from more predictable permitting and better geological mapping to infrastructure, energy, stronger regulatory and environmental agencies, and a national policy for critical and strategic minerals.
The ambition is substantial. Vale estimates that Brazil’s annual mineral output could rise from roughly R$300 billion today to R$535 billion by 2035. The broader mining value chain could support 5.3 million jobs and generate about R$1.3 trillion in tax revenue over the next decade. Brazil has the raw ingredients: exceptional geology. What it has struggled to do is turn that geological advantage into new projects.
Critical minerals feature prominently in the proposal. Vale explicitly supports a National Policy for Critical and Strategic Minerals, along with measures to encourage mineral processing and value addition. That fits with Brasília’s ambition to use Brazil’s mineral wealth to build higher-value domestic supply chains rather than remain primarily a supplier of raw materials.
But the mineral policy Vale recommends for Brazil does not necessarily have to mirror the investment strategy it chooses for itself. Chief Executive Gustavo Pimenta has made clear that the company continues to concentrate capital where it already has scale, expertise and competitive advantages: high-grade iron ore, copper and nickel. Rare earths and lithium remain under study, with no decision yet to enter either business.
That is not resistance to critical minerals – copper and nickel are themselves critical minerals. It is capital discipline. Pimenta notes that the rare-earths market remains small compared with copper or iron ore, while refining technology and capacity are still heavily concentrated in China. A commodity can be geopolitically important without automatically becoming the best destination for Vale’s capital.
Vale appears far more willing to spend where it already understands the economics. Pimenta says Brazil should again be developing mining megaprojects costing $15 billion to $20 billion, and argues that Vale has the capital, infrastructure and technical expertise to build them. In Carajás, the Alemão copper project alone is expected to require R$8 billion to R$10 billion. The constraint, then, does not appear to be a shortage of money. It is deciding where to put it.
That is where Vale’s corporate strategy does not necessarily align with Brasília’s industrial-policy ambitions. For the government, building a Brazilian rare-earths supply chain may make sense for reasons of technology, employment, supply security and geopolitics. For Vale, the same project must compete for capital against a copper expansion in Carajás or additional high-grade iron ore capacity – businesses where the company already has infrastructure, scale and decades of experience.
There is a precedent. In the late 2000s, the Lula administration pressed Vale, then led by Roger Agnelli, to invest more in Brazil and play a larger role in expanding domestic steelmaking. The logic was similar: if Brazil had the iron ore, why not convert more of it into steel at home, capturing more jobs and industrial value? Agnelli’s management resisted pressure for the company’s capital allocation to follow Brasília’s industrial priorities.
The difference is that the Vale of that era offered the government much greater channels of influence. State-linked pension funds and BNDES were part of the controlling bloc assembled through Valepar. After that structure was dismantled, Vale became a widely held corporation. Brasília can formulate a critical-minerals strategy, but it now has far fewer levers to make the miner’s investment decisions an extension of that policy.
That does not make industrial policy irrelevant. The state can expand geological mapping, reduce regulatory uncertainty, build infrastructure, foster technology and design incentives that make rare earths, lithium or other value chains sufficiently competitive to attract private capital. Vale itself proposes fast-track task forces for transformational projects, shortening development cycles that can stretch to 15 years to perhaps eight or ten, while maintaining environmental standards. Done well, that framework could help create other Vale-sized mining champions.
Fifteen years ago, Brasília wanted a cash-rich Vale to help Brazil produce more steel – an industry increasingly dominated by China. Today, it wants a mineral-rich country to capture more of the industrial value created by critical minerals. The ambition is familiar; Vale’s corporate structure is not. The government can decide which industries Brazil wants to develop. Vale’s board must decide where shareholders’ capital will earn the best return. Brazil may need national champions in rare earths. One of them does not necessarily have to be Vale.
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