Brazil Senate Advances Minerals and Data Center Bills

Instead, Congress has moved on proposals with clearer economic upside. Lawmakers advanced the National Policy for Critical and Strategic Minerals, including a 5 billion reais guarantee fund aimed at processing rare earths, and the Redata tax regime, which would exempt data centers from federal taxes and carry an estimated 5.2 billion reais fiscal impact in 2026.

For investors, the split is important. The minerals bill supports Brazil’s bid to capture more value in a strategically important supply chain where it holds the world’s second-largest rare earths reserve, while Redata could improve the economics of new digital infrastructure investment in a market trying to attract cloud and AI-related capital. Those measures are more market-friendly than the stalled labor and security debates, which could still resurface later and inject volatility into policy expectations.

Brazil-focused assets have already been trading with strong technical momentum, with the EWZ exchange-traded fund recently above both its 50-day and 200-day moving averages, while Petrobras shares have also extended gains. Adalytica’s Global Stability Sentiment gauge, however, shows a sharp deterioration in risk perception, underscoring how quickly Brazil headlines can swing broader emerging-market sentiment even when Congress is delivering pro-growth legislation.

The immediate test is whether the government can convert procedural victories into durable policy gains before the election cycle hardens positions in the Senate. If the stalled security and labor proposals slip into the post-election agenda, Lula may keep the upper hand in Congress for now — but the bigger political fights will still be waiting.