Brazil's Congress has passed a critical minerals bill that grants the government broader authority to scrutinize mining transactions, moving forward despite industry warnings that the new rules could deter foreign investment.

As Latin America's largest economy, Brazil holds the world's second-largest rare earth reserves and is also rich in other critical minerals essential for smartphones, electric vehicles, and military drones.

The legislation now awaits presidential approval from Luiz Inácio Lula da Silva, who had urged lawmakers to advance the bill and made it a centerpiece of his sovereignty-focused campaign platform. Lula believes Brazil should not merely export mineral resources used across various industries but also process them domestically to retain more value within the country.

The Senate-approved text establishes a special committee with the power to authorize changes in control of mining companies. This means future foreign acquisitions that run counter to the government's strategic interests could potentially be blocked.